Here’s How Osmosis Validators Made It

Two Osmosis validators made an enormous profit with only $200 that they turned into $2 million because of the liquidity provision bug on the chain. At first, it started as a small test of a potential bug, then turned into a full exploit.

According to the official account of FireStake professional staking service for delegators of the Cosmos Ecosystem, validators have not been thinking about the future of the Osmosis community and had their families in their minds rather than the project’s future.

in the process, we managed to convert $226 USD to ~$2M. We were thinking about our family’s future, and not the future of our community.

Shortly after doing so, we stressed throughout the night about how we can set things right. We’re currently working with the Osmosis team…

— FireStake | Validator (@stake_fire) June 8, 2022

Currently, they are working on the solution with the Osmosis team and are planning on returning the funds as soon as possible. FireStake also encouraged users who used the exploit and gained a significant profit to contact the Osmosis team and return the funds gained with the help of the bug. 

Despite FireStake coming clean, the community was still furious since validators should not be doing things done by FireStake and “remain above it.” Some users suggested that the company’s gesture was caused by the investigation launched by Osmosis developers who found out who was behind the exploit.

Later on, FireStake made an important announcement, telling community members that they are going to delegate their validator ownership to Kadabra Moon validator immediately and stop operating in the Cosmos ecosystem from now on.

Unfortunately, it is not clear exactly what issue caused the opening of an exploit that allowed two validators to turn $200 into $2 million. It is also important to note that exploiters were afraid of de-anonymization as their identity was open to the public and the realization of funds could have ended up with real jail time.