IONIC MONEY

DESCRIPTION OF EVENTS

Ionic Money is an advanced infrastructure solution aimed at providing efficient access to lending and borrowing for assets across the Optimism Superchain (OP Superchain). The platform combines powerful features that allow users to interact with a wide variety of assets through a single, intuitive interface. By leveraging the OP Superchain’s capabilities, Ionic brings together liquidity, lending, and yield strategies, simplifying access to decentralized finance (DeFi) opportunities. With a focus on capital efficiency, Ionic enables users to maximize returns while minimizing borrowing costs in an over-collateralized environment.

The platform's use cases are designed to extend the capabilities of the OP Superchain ecosystem. One key feature is the Superchain Aggregator, which optimizes lending and borrowing interactions across the ecosystem, ensuring access to the best liquidity and yield strategies. Another notable use case is the veION system, where users can lock $ION tokens to mint veION, influencing emissions and boosting their Ionic Score. This governance and incentive layer promotes long-term sustainability and rewards users for their participation. Additionally, Agentic AI uses artificial intelligence to enhance strategies by automating tasks such as risk assessment and yield optimization, providing users with advanced insights to enhance their DeFi strategies.

Ionic also boasts several important features aimed at setting new standards within the DeFi space. The platform supports an unrivaled range of assets, including future yield-bearing assets, enabling access to both DeFi and traditional finance strategies. With a strong focus on security, Ionic employs advanced features to ensure the safety of all assets, pools, and transactions. The platform also introduces capital efficiency by optimizing the use of liquidity, ensuring that funds are utilized effectively. Yield compounding is another key feature, allowing users to optimize returns by compounding yields across a variety of assets.

At the core of Ionic’s ecosystem is the $ION token. This token exists in various forms, including the base $ION (ERC20), the governance-oriented veION (ERC721), and the cross-chain xION (xERC20). Users yield $ION by providing liquidity and borrowing assets from Ionic’s markets. By staking their $ION tokens in incentivized pools, users can earn rewards in $ION, $VELO, and $AERO. Additionally, veION tokens allow liquidity providers to influence emissions, boosting rewards or reducing interest rates in the pools they support. This creates a dynamic environment where new strategies, such as Lending Wars, can emerge as different protocols and users compete for optimal yields.

Ionic's success is bolstered by its partnerships with key players in the digital finance and fintech sectors. These partnerships ensure the platform is backed by robust security features and aligned with industry leaders. By focusing on capital efficiency, yield optimization, and seamless access to liquidity, Ionic aims to revolutionize the way assets are managed across the OP Superchain and beyond, offering users a cutting-edge platform for decentralized finance.

The LBTC smart contract which the Ionic Money team believed was backed by actual bitcoin, had no such backing, and could be freely minted. The team behind this smart contract had tricked them into believing they were the real LBTC smart contract.

"The attacker (0x9E34d89C013Da3BF65fc02b59B6F27D710850430) initially had 0.01 ETH.

They deployed a fake token contract LBTC (0x964dd444e3192f636322229080a576077b06fba3).

These fake LBTC tokens were used to borrow multiple assets - MBTC, uniBTC, wrsETH, WETH, STONE, etc."

Losses have been estimate in the range between $8.6m and $8.8m.

Initial update from Ionic Money.

"There is an ongoing exploit on the ionic platform on @modenetwork.

Investigation from CertiK:

"We have seen an exploit of @ionicmoney on Mode Network. The attacker minted 250 LBTC tokens and used them to borrow multiple tokens.

The stolen funds, totaling ~$8.6M, were bridged to Ethereum and laundered through Tornado Cash."

Users should not interact with the application while the team investigates the root cause."

The following day, Ionic Money published an update.

"Yesterday, Ionic has become victim of a sophisticated social engineering scam enabling hackers to borrow funds supplied as supply liquidity on our Mode deployment.

We do want to reiterate that this was not a code-based breach and our protocol functions as intended on all deployments. The core code is safe. All chain deployments are safe.

We are currently working with investigative partners, law enforcement and all affected parties to trace and hold the perpetrators accountable to ensure the return of the full amount of funds borrowed.

We ask all our users to remain patient at this time while our team works with outmost professionalism on retrieving the funds and resolve the issue completely.

Please join our discord for more information and latest updates regarding the situation.

Note to the Perpetrators: please contact us proactively via TG or email for a more favorable negotiation regarding retrieval of the borrowed funds."

The Ionic Money team continues to hope that funds are returned, investigate into the theft, and post updates to their community.

Explore This Case Further On Our Wiki

Ionic Money is an advanced platform facilitating efficient lending and borrowing of assets across the Optimism Superchain (OP Superchain). The platform supports an extensive range of assets and features. Ionic fell victim to a sophisticated social engineering attack in which attackers minted fake LBTC tokens, using them to borrow multiple assets, resulting in a loss estimated at $8.6 to $8.8 million. The funds were then bridged to Ethereum and laundered through Tornado Cash. Ionic clarified that this exploit was not related to a code breach, and the platform’s core security remains intact. The team is working with law enforcement and investigative partners to trace the perpetrators and recover the stolen funds, urging users to refrain from interacting with the application until the issue is fully resolved.

Rekt - Ionic Money - Rekt (Feb 7)
@ionicmoney Twitter (Feb 7)
Ionic Multichain Money Market (Feb 7)
@quillaudits_ai Twitter (Feb 7)
@quillaudits_ai Twitter (Feb 7)
Initial Minting Of 250 "LBTC" - Mode Explorer (Feb 7)
250 "LBTC" Provided as Collateral - Mode Explorer (Feb 7)
Borrow Everything With The "LBTC" - Mode Explorer (Feb 7)
@CertiKAlert Twitter (Feb 7)
@spreekaway Twitter (Feb 7)
@ionicmoney Twitter (Feb 6)

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