$900 000 USD
DESCRIPTION OF EVENTS
Vether is a "strictly-scarce Ethereum based asset." "Vether is designed to be a store-of-value with properties of strict scarcity, unforgeable costliness, and a fixed emission schedule." It describes itself as "[a]n asset that stores value created by dreamers and builders. With limited supply and with technical properties that allow for even fairer distribution and transparent costs."
"There will only be 1,000,000 Veth ever." "No one can control it and there’s no blacklist. Every day a portion gets released to whoever burns Ether for it. This mechanism is called Proof-of-Value." "Every Veth in the world was paid for by Ethereum."
"Vether’s still in its infancy and its beauty is in its simplicity. At the same time, as with every major crypto (ETH, BTC, etc.), it has its share of growing pains."
"On June 30, Vether (VETH) had their entire Uniswap pool drained, about 919,299 (VETH) equivalent to US$900K, for just 0.9 ETH ($200)."
"Before going forward, we need to note that Strictly-Scarce loves simplicity. So much so that Vether V3 had the ability to upgrade from V2 to V3 and skip an approval step, breaking from the ERC-20 standard."
"You also need to know that Vether has a little used feature. You have the ability to exclude an address from the transfer fee of 10 basis points built into Vether. For most folks this is unnecessary, but this feature played a big role in the exploitation of Vether V3."
"Feeling the pressures of a potential illegitimate grab of the remaining Vether V2, the community and dev pushed out V3. Unbeknownst to most upgraders, there was a fatal flaw created by the shortcut created for upgrading from V2 to V3."
"By paying the 128 Vether fee, someone could control all of the Vether V3 using the flaw in the code. This came to light when someone anonymous (we’ll call this person “Anon”) bought Vether off Uniswap and then paid the 128 exclusion fee. They then claimed all the Vether in the Vether contract. About 900,000 Vether. They then dumped 150,000 Vether into Uniswap and pulled out ~15 Ethereum (not $900,000 as you may have read on Twitter). This devalued all Vether V3 and destroyed its value."
"Coingecko researcher Daryllautk tweeted that VETH suffered a hacker attack on the decentralized exchange Uniswap. The hacker stole 919,299 VETH (worth $900,000) using only 0.9ETH. After the attack, VETH officially stated that the contract was used by the UX improvement it placed in transferForm(), which was their fault. They will redeploy vether4 and will compensate all affected Uniswap pledgers."
"Vether V3 was an upgrade to ensure folks could upgrade without having someone take their Vether. The upgrade was conducted before anyone could utilize the exploit and was completed as a precaution and went into effect shortly after the end of Vether Day 49." "V4 is up. You may resume burning ETH for VETH."
"All Vether V4 has been airdropped based on wallets in the snapshot. Ether has been reimbursed to folks who burned Vether in Day 51, to folks who had pooled their Vether and lost Ether due to the exploit, and even some folks who purchased Vether after the exploit and before the last upgrade to V4."
"These are growing pains and it is a testament to the dev and community that issues were caught, acknowledged, and dealt with. You can tell a lot about someone by how they deal with adversity and if anything, Vether was made stronger by the work the entire community put in to make things right, learn from their mistakes, and set a better foundation for the future."
Vether was a crypto-asset which has a heavily limited supply.
A series of exploits were found, each resulting in an upgrade to the protocol, the latest of which was last year.
The lost assets were reimbursed in V4.
HOW COULD THIS HAVE BEEN PREVENTED?
No assets were lost in this case, since the protocol relaunched.
CipherTrace Cryptocurrency Crime and Anti-Money Laundering Report 2020 (Jun 20)
SlowMist Hacked - SlowMist Zone (May 18)
Vether Price | VETH Price, USD converter, Charts | Crypto.com (Jul 13)
Vether - A strictly-scarce Ethereum based asset. (Jul 13)
Vether price, VETH chart, market cap, and info | CoinGecko (Jul 14)
Vether Upgrade Deployed (Jul 14)
Vether Contract Upgrade (Jul 14)
@strictly_scarce Twitter (Aug 15)