$260 000 USD

MARCH 2024

GLOBAL

OPENLEVERAGE

DESCRIPTION OF EVENTS

"Money Market with Possibilities With permissionless lending, borrowing, and margin trading, OpenLeverage enables borrow any asset, and long or short positions on any pairs on decentralized exchanges."

 

"OpenLeverage is a permissionless lending margin trading protocol that enables traders or other applications to long or short on any trading pair on DEXs efficiently and securely." "Anyone can create lending and trading pools for any trading pair available on a DEX, with default interest rate and risk parameters, in a single click."

 

"Margin trade thousands of tokens with best prices from 1inch, Uniswap, PancakeSwap, Sushiswap, and borrow with 90% reduced rate than other platforms." "[P]ledge any token as collateral, and borrow another token in a token pair as long as sufficient liquidity provided." "Isolated and independent lending pools facilitate single-sided token lending with minimal risk. Margin interest incurred by borrower is paid out to lenders." "Deployed to Ethereum, BNB Chain, Arbitrum, and Kucoin Community Chain, and empowering more EVM-compatible chains soon."

 

"The DeFi protocol OpenLeverage has been attacked, resulting in a loss of approximately $260,000. In light of this, OpenLeverage has decided to discontinue the OpenLeverage trading and lending protocol. OpenLeverage is initiating processes for users to close trades/borrowings and withdraw funds safely. All protocol actions will remain paused until withdrawal processes begin early next week."

 

"The hack involved a two-step attack strategy, each consisting of two transactions. In the first transaction, the attacker initiated a margin trade and a small borrow position, then proceeded to liquidate it. However, the liquidation process was flawed, as it incorrectly accounted for borrow amounts from both the “borrow” function and margin trading. Additionally, the attacker exploited the “repayBorrowEndByOpenLev” function within the liquidation process, allowing them to close the borrow position with minimal repayment. In the second transaction, the attacker withdrew tokens using the “payoffTrade” function without making any repayment, leveraging the absence of a borrowed amount from the preceding transaction. To circumvent time constraints, the attacker split their actions into two separate transactions due to a block time check."

 

"- The recent exploit caused a loss of ~220k on BNB Chain & ~40k on Arbitrum. - Thankfully, our in-protocol insurance, OLE buyback fund, and protocol reserves will cover all protocol losses. - So, NO user funds will be lost."

 

"In light of this, we've made the tough decision to discontinue the OpenLeverage trading and lending protocol.

 

We're initiating processes for users to close trades/borrowings & withdraw funds safely."

 

"All protocol actions remain paused until withdrawal processes start about early next week.

 

Your support & patience mean the world to us. Stay tuned for updates."

 

"The hacker will receive a bounty to return funds, and the trace and legal process will start immediately."

 

"We’ve enabled fund withdrawals for the lenders. All margin trades and borrow positions are required to close manually before the borrowing rate hike to 2000% annualized from Monday."

OpenLeverage was a permissionless lending margin trading protocol that facilitates borrowing and margin trading on decentralized exchanges (DEXs). Users could create lending and trading pools for any trading pair available on a DEX with default interest rates and risk parameters. However, the protocol experienced an attack, resulting in a loss of approximately $260,000. In response to the attack, OpenLeverage has decided to discontinue its trading and lending protocol and is initiating processes for users to safely close trades, borrowings, and withdraw funds. OpenLeverage has ensured that all protocol losses will be covered by in-protocol insurance, the OLE buyback fund, and protocol reserves, with no loss to user funds.

Sources And Further Reading

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