Polygon Lending Protocol 0VIX Exploited of $2M by Hackers

• The vGHST token was the target of the attack by the hackers.
• The lending markets were put on hold while the 0VIX crew looked into the situation.

Lending protocol on Polygon and Polygon zkEVM, 0VIX, purportedly exploited to the tune of $2 million. Multiple stablecoins, including Ethereum and Polygon’s native MATIC token, as well as Aavegotchi’s staked vGHST token, may be used as collateral thanks to this protocol. Aavegotchi is a blockchain-based game that takes inspiration from the classic Tamagotchi game.

The vGHST token was the target of the attack. In an effort to return assets to Ethereum and convert the stablecoins to ETH. The attackers have already moved $1.4 million in USDC and $600,000 in USDT using the bridging protocol Stargate Finance, according to an independent security researcher named Officer’s Notes. The lending markets were put on hold while the 0VIX crew looked into the situation.

Price Oracle Manipulation

According to PeckShield, a blockchain security and data analytics firm, the attackers borrowed $6.12 million in stablecoins in a “flash loan” to influence the vGHST lending pool on 0VIX. After using the stolen stablecoins to open vGHST lending positions. The hackers manipulated the protocol’s price oracle, as confirmed by Blocksec, a blockchain security firm.

In less than 30 minutes, the value of GHST, Aavegotchi’s native token, increased by 24.7% from $1.13 to $1.41, as measured by CoinGecko. The vGHST lending pool became bankrupt due to the sudden increase in GHST prices. And the attacker liquidated the pools, stealing the collateral.

The price of a cryptocurrency with little liquidity, like GHST, may be artificially inflated by an attack on the token’s price oracle. The hacker then sells their inflated tokens for other tokens that are more liquid and have a more steady value.

Price oracle manipulation hacks are often used in the DeFi sector. And are considered to be a kind of severe assault.

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