The attacker exploited the absence of safeguards in liquidity conversions, allowing them to steal the funds.
Adding to the growing list of protocol hacks in the cryptocurrency industry, Jimbos Protocol has become the latest victim of attackers, resulting in a significant loss of funds.
Blockchain security firm PeckShield reported that Jimbos Protocol, a liquidity protocol operating on the Arbitrum system, was hacked on the morning of May 28. The attack led to the loss of 4,000 ETH, which is valued at around $7.5 million.
The attacker exploited a vulnerability in the liquidity conversions of Jimbos Protocol. The protocol’s liquidity was invested in a price range that didn’t require equal values, creating a loophole. This allowed the attacker to reverse swap orders and benefit from the situation.
Despite its recent launch, the Jimbos Protocol was designed to tackle liquidity and volatile token prices using a new testing method. However, it seems that the protocol’s mechanism was not well-developed, resulting in a vulnerability that favored attackers. As a result, the price of the JIMBO token, the protocol’s underlying asset, has dropped by 40% and is struggling to regain its value.
PeckShield’s investigation revealed that the attackers were able to withdraw a large amount of 4,090 ETH from the Arbitrum network. They then used a bridge called Stargate and the Celer Network to transfer and collect around 4,048 ETH from the Ethereum network.
— PeckShieldAlert (@PeckShieldAlert) May 28, 2023
Hacking incidents targeting decentralized finance (DeFi) protocols are not uncommon in the cryptocurrency market. Although there have been fewer reported attacks compared to previous years, the community has still experienced several instances of exploitation recently.
Despite attempts to improve security measures, the DeFi ecosystem still faces ongoing difficulties in protecting against vulnerabilities and unauthorized access. One recent instance is the flash loan attack on the 0VIX protocol, which led to a significant loss of almost $2 million.
Another notable incident involved the takeover of Tornado Cash, a well-known protocol focused on privacy. Unknown attackers managed to breach the system and steal a considerable amount of TORN tokens, resulting in significant financial losses.
Also Read This : Arbitrum (ARB) 2023 Price Prediction: $2 Target
Important: This article is intended solely for informational purposes. It should not be considered or relied upon as legal, tax, investment, financial, or any other form of advice.