WeDEX Flash Loan Attack

Notice: This page is a freshly imported case study from the original repository. The original content was in a different format, and may not have relevant information for all sections. Please help restructure the content by moving information from the 'About' section to other sections, and add any missing information or sources you can find. If you are new here, please read General Tutorial on Wikis or Anatomy of a Case Study for help getting started.

Notice: This page contains sources which are not attributed to any text. The unattributed sources follow the initial description. Please assist by visiting each source, reviewing the content, and placing that reference next to any text it can be used to support. Feel free to add any information that you come across which isn't present already. Sources which don't contain any relevant information can be removed. Broken links can be replaced with versions from the Internet Archive. See General Tutorial on Wikis, Anatomy of a Case Study, and/or Citing Your Sources Guide for additional information. Thanks for your help!

WeDEX

The WeDEX smart contract hot wallet was reportedly exploited for $100k. Shortly afterward, the team optained an audit. It's unclear if the team has done anything to compensate affected users.

This is a global/international case not involving a specific country.

About WeDEX

"WeDEX is a decentralized exchange based on Ethereum. WeDEX adopts the Loopring Protocol and Zkps technology, which greatly improves transaction speed and user experience on the premise of ensuring transaction security. WeDEX does not take any custody of user assets, each trade can be verified on the chain and the data is transparent in WeDEX. With on-chain data availability, the throughput is as high as 1400 trades per second. The user experience is comparable to centralized exchanges. Enjoy your crypto trading in WeDEX."

"WEDEX is the leading decentralized exchange on Binance Smart Chain, we bring the freedom and privacy for the user! Why pay more? WEDEX runs on Binance Smart Chain, a blockchain with much lower transaction costs than Ethereum or Bitcoin. Trading fees are lower than other top decentralized exchanges too, so that's a double win for you! Trade directly from your wallet app. Unlike centralized exchanges like Binance or Coinbase, WEDEX doesn’t hold your funds when you trade: you have 100% ownership of your own crypto."

"On October 18, 2021" "#WEDEX suffered a flash loan assisted attack. The attacker was able to gain profit from deposit and emergencyWithdraw operation."

"WeDEX lost $100K after an attacker was able to continuously call emergencyWithdraw() function due to a misconfiguration." "The incident caused by the #WEDEX unique feature, users can receive commissions ($DEX) when deposit LP tokens to WedexChef if the pool’s locking period not 0."

"When the variable emergencyLockingWithdrawEnable is "TRUE", the attacker can trigger the function emergencyWithdraw() to withdraw tokens without any explicit restrictions."

"The attacker repeated the steps “deposit-emergencyWithdraw” to generate more commissions. Lastly, the attacker amplified the profit by borrowing flash loans to manipulate the DEX price."

"Hey there dear community members! WEDEX contract is audited and listed, check the report by link below and stay safe."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - WeDEX Flash Loan Attack

Date	Event	Description
October 18th, 2021 12:00:00 AM	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Total Amount Lost

The total amount lost has been estimated at $100,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Prevention Policies

Which policies could have prevented this event from happening?