DEUS Finance loses $6 Million following stablecoin hack

DEI losses over $6M in a hack

DEUS finance is a decentralized marketplace that allows all assets, digital and non-digital assets, and commodities to be traded on the Ethereum blockchain.

PeckShield, a blockchain security company, released a report that showed DEUS Finance company had been hacked and lost over $6 million. The hack took place by breaching the security network of DEI, the stablecoin of DEUS. The hacker mainly targeted two networks, BNB chain and Arbitrum.

Regarding exact figures, DEUS confirmed they lost about $5 million from the Arbitrum network and $1.3 million from BSC. The attack was initiated by the bot on BSC which eventually led to a loss of $1.3 million. The hacker then targeted the Arbitrum network compromising ARB/ETH deployments and losing over $5 million.

Till now the basic implementation error in token contracts is considered the root cause of the hack. The hackers found a loophole in the DEI smart contract. They figured out that DEI’s smart contract allows anyone to mint a new DEI without any control. They exploited this vulnerability of the DEI smart contract and took forward the hacking.

The attack was confirmed by the protocols and paused all the contracts to prevent further damage. The DEUS team informed the same through Twitter, adding that they will soon start a recovery and redemption plan after a full analysis of balance and snapshots.

DEUS is losing the trust of users

This is not the first hack on DEUS. Previously it has been attacked twice leading to a loss of $13.4 million and $3 million respectively.

Hackers each time used different mechanisms. Hackers used flash loans and tricked the data reading format of the DEUS smart contracts from the liquidity pools. Attackers then changed some values, inflated the loan and earned huge profits after repaying the loan.

The attackers took a loan of $143 million as a flash loan and made a profit of $13.4 million. It was suspected that more losses have occurred

Not just the hacks, DEI stablecoin has also suffered several setbacks. The stablecoin has depegged to as low as $0.28 after a 71% fall following the hack. The coin had also dropped to $0.58 as a result of the LUNA-UST collapse last year.

All the occurrences have raised a question on the security of DEUS and if it is capable of protecting users’ assets or not.