The Zabu Finance decentralized finance project has been hacked through one of the liquidity pools. Hackers managed to withdraw $ 3.2 million in various tokens. This was the first major hack of the DeFi project on the Avalanche blockchain.
The hack of the project was first reported by a Twitter account under the pseudonym DeFiPrime. A little later information confirmed and the official Zabu Finance account:
“The Zabu team has not sold a single token from their stocks. We are in the process of hacking, it looks like it is from the Spore pool. We are investigating the problem and we need help. ”
The development team later confirmed that the vulnerability was in the Spore pool. The attackers used a protocol mechanism called “Transfer Tax” to issue tokens. The vulnerability allowed the issuance of a significant amount of ZABU tokens as a reward for providing liquidity, resulting in a price crash. The ZABU price collapsed from $ 0.004 to $ 0.00002 after the hack.
Shortly after the breach was discovered, the Zabu Finance development team issued a zero reward for providing liquidity. The team is now planning to distribute ZABU v2 tokens to hacked users.
“Thus, people who have lost money after the hack will receive tokens and can continue to support the protocol if they want,” the developers write.
Earlier, Bitwise CFO Matt Hougan said that the constant hacking of DeFi projects indicates that the industry is too early in its development.
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