BurgerSwap Goes Hungry

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BurgerSwap

The BurgerSwap smart contract contained an exploit which allows for an attacker to use a fake coin, which they then used to create trading pairs and ultimately remove funds.

The BurgerSwap team has fixed the specific vulnerabilities and put together a plan to compensate their affected users.

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

About BurgerSwap

"BurgerSwap is the very first Uniswap-like application launching on Binance Smart Chain. The exchange was launched on September 10th at 16:00 PM UTC." "The BurgerSwap exchange was built from the ground up, with 14 contracts deployed and significantly more code than any competitor in the space, while not having copied a single line of code for Uniswap and comparable protocols."

"BurgerSwap [was] created for the community and its growth will be highly dependent on the community, by default." "BurgerSwap emphasizes the concept of a “democratized decentralized exchange”, which mean that governance is not optional but mandatory. The users make the rules!"

"At around 3 am on May 28th (UTC+8) BurgerSwap encountered a flash loan attack." "Burger Swap suffered a flash loan assisted reentrancy attack, resulting in over $7M worth of assets lost. The attacker was able to swap twice before the number of tokens in the reserve got updated."

"Hackers created their own Fake Coin (non-standard BEP-20 tokens) and formed a new trading pair with $BURGER; by adjusting the routing, attacker created $BURGER -> Fake Coin -> $WBNB routing; through $BURGER -> Fake Coin trading pair, attacker re-entered BurgerSwap through Fake Coin & manipulated number of reserve0 and reserve1 in the pair’s contract, causing the price to change; Then re-enter the transaction again and trade back the $WBNB, to obtain the extra amount of WBNB inputted."

"The exploit led to the theft of some $7.2 million in altcoins, including $3.2 million in BURGER, $1.6 million in wrapped binance coin (WBNB) and $1.4 million in tether (USDT, +0.12%)." "In its Twitter account, the project revealed the cyber attacker was able to take 4,400 WBNB worth $1.6 million, 22,000 BUSD worth $22,000, 1.4 million USDT amounting to $1.4 million, 423,000 BURGER tokens worth $3.2 million, along with 142,000 xBURGER worth $1 million, 2.5 ethereum with a value of $6,800 and 95,000 ROCKS." "Burgerswap explained on Twitter that the blockchain security company Peckshield helped with the investigation."

"Since [becoming] aware of the attack, [BurgerSap] suspended Swap, Liquidity, and BURGER generation to fix and resolve the issue. As the latest update, [they] have just resolved all tech issues relating to the attack and have re-opened Swap and Liquidity. More importantly, [they] have put together in place a compensation plan to cover affected users’ losses."

"All users who ... suffered loss as a result of the attack before May 27, 2021, 06:54:46 PM +UTC (Block Height 7781159) will be eligible for the compensation plan." "The compensation token — $cBURGER will be airdropped to those eligible users in proportion to the value of the $BURGER LP they held immediately prior to the attack." "All $cBURGER holders will be able to obtain $BURGER rewards by staking their $cBURGER into the [Compensation Pool] which will release $BURGER in a span of 90 days in a linear proportion."

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 - BurgerSwap Goes Hungry

Date	Event	Description
May 27th, 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 $7,200,000 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

Special care needs to be taken to ensure that tokens interacted with are expected. While auditing may help reduce the chances of errors, it is not foolproof.

A more secure storage of funds would have the majority in an offline multi-signature wallet.