QUADRIGA INITIATIVE
CRYPTO WATCHDOG & FRAUD RECOVERY PLATFORM
A COMMUNITY-BASED, NOT-FOR-PROFIT
$515 000 USD
JULY 2021
GLOBAL
ARRAY FINANCE
DESCRIPTION OF EVENTS
"Invest in trusted and user-curated portfolios. Quit protocol hopping and start earning. Create and easily invest in trusted portfolios, earning real returns." "Made for the decentralized community, built by a public team with experience at Consensys and Fortune 500 companies." "The Array protocol has been crafted to solve the fundamental issues within the DeFi space. Developed and tested by industry veterans, the ArrayDAO bonds and backs tokens, locking real value as collateral behind each Array token, minimizing volatility."
"Algorithmically diversify based on personal risk tolerance. Quit being limited by a handful of strategies- our tools allow you to build and deploy yourself, earning performance fees in the process." "By aligning incentives between users, traders and liquidity providers, the ArrayDAO keeps DeFi collaborative by distributing rewards where they matter most. With Array, passive DeFi is possible. No longer will you need to chase APY and wipe out your profits with transaction fees."
"Array is the first ever passive DeFi protocol, aimed at long term, consistent growth. Array is token and protocol agnostic, which allows it to constantly be modified to grab safe yield, diversifying your DeFi. One click enters an Array portfolio, exposing you to dozens of yield farms and assets, which rebalance automatically."
"Around 4:30am CST [on July 19th], Array was hit with a flash loan attack." "Array Finance was attacked by lightning loans. The attacker used Array Finance's pricing mechanism to rely on aBPT's totalSupply to attack Array Finance and made a profit of 186.62 ETH." "The attacker used Array Finance's pricing mechanism to rely on aBPT's totalSupply to attack Array Finance. Officials stated that the attacker made a profit of about 272.94 ETH, worth about $515,000."
"The attacker borrowed a flash loan from AAVE and invoke the “buy” function of array to mint 430 ARRAY. They then invoked our “joinpool” function 5 times to earn 726.38 aBPT. They then burned the 430 ARRAY to receive 77.17 aBPT. When the attacker exited the pool, they burned 804.55 aBPT tokens and received 748,271.55 DAI + 751,225.08 USDC + 997.62 WETH + 22.63 WBTC + 22.74 renBTC effectively draining our balancer pool. After all of this, the attacker received around 272.94 ETH or about ~$515k in stolen money."
"First, the attacker invoked the buy function of the Array Finance. The attacker gained 430 ARRAY tokens minted by the Array Finance using 45.91 WETH. Then the attacker invoked the joinPool function of a closed source contract (Array Collater - 0xa800cda5) five times. He/she deposited 676,410.58 DAI + 679,080.46 USDC + 901.82 WETH + 20 WBTC + 20 renBTC and gained 726.38 aBPT tokens minted by Array Collater. The attacker invoked the sell function to burn 430 ARRAY tokens and got 77.17 aBPT tokens. At last, the attacker invoked the exitPool function of the Array Collater. He/she burned 804.55 aBPT tokens obtained in previous two steps and obtained 748,271.55 DAI + 751,225.08 USDC + 997.62 WETH + 22.63 WBTC + 22.74 renBTC."
"I want to apologize on behalf of the team that we let this happen. I believe most of the team is in agreement that we’d like to try and find a company or organization to collateralize our liquidity that was lost and pay them back post launch. However, we want the CCO contributors to vote on how to proceed."
"Moving forward, the rest of the team has agreed to putting Gavin in charge. We’re also removing Gismar from our team as we believe his negligence + carelessness lead to the liquidity being stolen or that he himself stole the money. We are not sure which one it was or if it was both." "We are actively trying to contact and reach Gismar but all of his social media has been turned off and scrubbed. We genuinely are almost the finish line and happy to answer any questions." "Should anyone have contact information as it relates to Gismar, please send it to me."
Array Finance is an online investment platform, which included a large number of funds in a smart contract hot wallet.
A vulnerability in that smart contract most likely allowed one of the team members to make off with the funds. The team has not provided any further information after their update on July 20th.
HOW COULD THIS HAVE BEEN PREVENTED?
Funds stored in smart contract hot wallets can generally not be considered secure. Funds should be secured by requiring multiple signatures on withdrawals and key contract functions.
SlowMist Hacked - SlowMist Zone (May 18)
blocksec-incidents/2021.md at main · openblocksec/blocksec-incidents · GitHub (Aug 11)
@arrayfinance Twitter (Aug 11)
The Analysis Of The Array Finance Security Incident (Aug 11)
array.finance (Aug 22)
@arrayfinance Twitter (Aug 22)
Welcome To Array Finance (Aug 22)
Ethereum Transaction Hash (Txhash) Details | Etherscan (Aug 28)
