Stablecoin Protocol Beanstalk Loses Over $180 Million to Hacker

Daniel Attoe
Daniel Attoe

Updated · Apr 19, 2022

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The attacker took advantage of a loophole to breach the protocol.

Exploited for BEANs

Credit-based stablecoin protocol Beanstalk fell victim to hackers exploiting its system leading to the loss of all its collateral. The protocol lost an estimated total of $182 million worth of cryptocurrency assets.

Peckshield, a reputable blockchain security firm, announced the hack:

“The BeanstalkFarms was exploited in a flurry of txs leading to the gain of $80 million+ for the hacker (The protocol loss may be larger), including 24,830 ETH and 36 million BEAN.”

BEAN is the protocol’s native token.

Peckshield added that its “initial analysis” shows a loss of $182 million. The firm went on to give a breakdown of the exploited digital assets:

  • 79,238,241 BEAN3CRV-f
  • 1,637,956 BEANLUSD-f
  • 36,084,584 BEAN
  • 0.54 UNI-V2_WETH_BEAN

On Monday, Beanstalk made an offer to the cybercriminal. It offered to let go of 10% of the exploited bounty for a return of the rest of the loot.

How it Happened

The hacker responsible seeded the protocol with governance proposals requesting donations for Ukraine. Like many other DeFi projects, Beanstalk’s governance allows its users to vote on code changes. The extent of voting rights aligns with the value of tokens that a user owns.

Armed with this knowledge, the hacker took out a flash loan, a short-term credit facility that lets people borrow huge amounts of crypto. After borrowing nearly $1 billion dollars in DAI, USDC, and USDT, they took over 67% of the governance and approved their proposals.

The hacker funneled the stolen funds through Tornado Cash, a transaction privacy protocol. The platform was used in the same way by those behind the $625 million hack of Axie Infinity bridge Ronin.

Sources.

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Daniel Attoe

Daniel Attoe

Daniel is an Economics grad who fell in love with tech. His love for books and reading pushed him into picking up the pen - and keyboard. Also a data analyst, he's taking that leap into data science and machine learning. When not writing or studying, chances are that you'll catch him watching football or face-deep in an epic fantasy novel.

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