$0 USD

MAY 2020

GLOBAL

LOOPRING

DESCRIPTION OF EVENTS

"Loopring is a software running on Ethereum that aims to incentivize a global network of users to operate a platform that enables the creation of new types of crypto asset exchanges."

 

High transaction fees are "exactly what Loopring aims to remedy, by delivering a digital economy that empowers its users while still giving them complete control over their assets. With Loopring, people no longer have to sacrifice efficiency and affordability to take advantage of Ethereum’s network security."

 

"Loopring (LRC) is an Ethereum Layer-2 scaling protocol that enables the building of decentralized exchanges which rival centralized exchanges in terms of performance. The network can handle up to 1,000 times more trades per second than Ethereum with each one costing a mere fraction of a cent."

 

"Loopring's zkRollup L2 solution offers the same security guarantees as Ethereum mainnet, with a big scalability boost: throughput increased by 1000x, and cost reduced to just 0.1% of L1. Ethereum is now unleashed. One year ago, we launched the first zkRollup on Ethereum - now we put its power in your pocket. Smooth orderbook trading, AMMs, and global payments, right from the Loopring wallet."

 

"Most notably, Loopring claims its platform will allow exchanges built on top of it to sidestep the slow speeds and high costs associated with decentralized exchanges on Ethereum through the use of a newer type of cryptography called zero-knowledge rollups, or zkRollups."

 

"Check out the Loopring Exchange new dark theme. When you're trading this weekend, keep your ETH and your eyes safe." "Loopring Monthly Update, April 2020 Protocol: more features packed into v3.5. Product: exchange API & referral program released, UI update. Relayer: maxed out optimization with 1024-trade settlement blocks, deposit/withdraw times halved."

 

"Each account on Loopring Exchange needs an EdDSA private key (the account key) to sign off-chain (aka layer-2) requests. Our frontend used to generate these account keys based on users’ passwords, but as pointed out by StarkWare and other friends on Twitter, such brain-password based solutions are bad."

 

"Loopring has appeared a serious front-end error, the private key material is set within a range of 32-bit integer, you can find all user private key pairs by brute force method, due to the user's EdDSA key pair is actually limited to a space of 32-bit integer, the hacker can find out the EdDSA key pair of all users by brute force method. Affected by this, Loopring Exchange shut down for half a day for maintenance and upgrade."

 

"A critical frontend bug has been identified, we will stop our relayer service and and put Loopring Exchange into maintaince mode. Stay tuned for more update."

 

"More details on the @loopringorg situation from yesterday. Loopring users need to reset their passwords. TLDR: Funds are safe. Bug in password hash made it so an attacker could potentially break passwords and start trading with funds. Withdrawals only possible to user wallets."

 

"I wouldn't call a frontend bug when you ask your user to type a password (very likely to be something like 1234) and mix it with your user's ethereum address to derive your user account key... It's a very bad implementation."

 

"We are still verifying the bug report. In the meanwhile order submission has been suspended, deposits and withdrawals still work as expected. Your asset on Loopring is secure even if the bug is confirmed positive. We will release more update."

 

"#Loopring implemented a new approach to generating layer-2 account keys [with n]o more passwords, [u]pdatable/revokable, [n]o account keys will ever be the same, [f]ully compatible with smart wallet, [and d]ecoupled from the Loopring protocol."

 

"Our frontend used to generate these account keys based on users’ passwords, but as pointed out by StarkWare and other friends on Twitter, such brain-password based solutions are bad. We have implemented a new approach to generating and managing account keys on the client-side"

 

"The web app shall allow users to change the account keys for the same Ethereum addresses, so they can export and share their account keys to third parties (such as market makers) and later revoke the account keys. This means the mapping between Ethereum addresses and account keys has to be one-to-many, not one-to-one. The seed for generating an account key shall contain the entropy of a valid ECDSA signature from the corresponding Ethereum address. When a browser tab is open for the exchange web app, we shall allow users to refresh/reload the web page without re-login or re-signing any messages using the corresponding Ethereum addresses. If the user closes the tab opened for the app, the session should end immediately, and the user will have to log in again. If the user explicitly logs out, all account-key related session/local data shall be cleaned.No sensitive data shall be sent to the relayer."

 

"We thank @VitalikButerin and @gluk64 for their recommendations. Our engineers are open minded and look forward to feedback to improve our web app’s user experience and security further." "And thank you to @StarkWareLtd and @avihu28, who initiated the whole process with their findings."

 

"http://Loopring.io has finished upgrade now. Funds are safe. Bug related to password on the product frontend (not protocol), but presented a risk via trading."

 

"Loopring Exchange v2 is using Loopring protocol 3.6 which is in beta. Use at your own risk. View risk warning."

Loopring is a decentralized trading platform. The Loopring protocol involves keys to manage transactions. These keys were based on password input provided by the user, which often had a low entropy and was poorly protected.

 

As a result, it was possible for an attacker to interfere with ongoing trades or create unintended trades.

 

The Loopring platform vulnerability was fixed with no funds lost.

HOW COULD THIS HAVE BEEN PREVENTED?

Sources And Further Reading

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