Osmosis, a blockchain that runs a large decentralized exchange (DEX) in the Cosmos ecosystem, was paused today by validators following an exploit, which resulted in the loss of millions of dollars worth of customers’ funds.
After a critical bug in its liquidity pools led to the loss of relatively $5 million, the core development team and the network validators paused the chain at block #4713064.
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It was a Reddit user who first noted the bug. He then warned in a now-deleted post that if someone added funds to an Osmosis pool and removed it, the position somehow increased by 50%.
On-chain transactions reveal that before the network was paused, users had already begun to exploit the vulnerability to siphon funds out from Osmosis.
The Osmosis team confirmed that the bug let malicious users drain about $5 million worth of assets from liquidity pools.
Osmosis team tweeted, “Liquidity pools were NOT “completely drained”. Devs are fixing the bug, scoping the size of losses (likely in the range of ~$5M), and working on recovery.”
Liquidity pools were NOT "completely drained".
Devs are fixing the bug, scoping the size of losses (likely in the range of ~$5M), and working on recovery.
More info to come. https://t.co/WOu7MMgSUM
— Osmosis 🧪 (@osmosiszone) June 8, 2022
The Bug Has Been Identified
According to the latest update, the cause of the massive exploit has been identified and patched. However, the validators are still initiating some necessary tests before a restart can be recommended.
Osmosis team tweeted, “Update: The bug has been identified and a patch written. More testing is underway before validators are recommended to coordinate a restart. Full bug report and action plan for more thorough and proper end to end testing of chain upgrades to follow in coming days.”
Update: The bug has been identified and a patch written.
More testing is underway before validators are recommended to coordinate a restart.
Full bug report and action plan for more thorough and proper end to end testing of chain upgrades to follow in coming days. https://t.co/DjJMOEQxrT
— Osmosis 🧪 (@osmosiszone) June 8, 2022
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