VETHER V1 Blurr Exploit

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Vether

Vether was a stablecoin. This coin had a vulnerability which made the minting process confusing and unfair for different groups of users, which led to a protocol upgrade.

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

About Vether

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."

"In the early days of Vether, a member of the Vether community (Blurr) discovered that Vether’s burn process had a potential exploit." "[W]ith this trick you get a discount on your ETH burned. You can burn gas for VETH and get some of the gas payment back for free."

"When burning a token without Uniswap value for VETH, the gas used is burned instead. In Ethereum, gas is a finicky thing and without going into too many details, Blurr discovered you can trick the Vether contract into crediting you with more burned ETH than you end up spending."

"While this does cost you something (can’t just spam for free), it also creates an unfair advantage for those who don’t know how to utilize this trick. This can lead to an unfair distribution of VETH."

"Strictly-Scarce (dev behind Vether), gave everyone the ability to use this gas method directly into the dapp. Burn some ETH as gas and get some of it back. This makes it fair since anyone can do it. This might throw off how much is actually burned and how much people value it in the marketplace (Uniswap), but there should be an equilibrium which forms."

However, this left "Vether at the mercy of changes in Ethereum gas characteristics which would affect its long term viability."

"Going forward, the plan was to release a new asset (Vether V2) that removed the ability to burn ERC-20 tokens. This would close the gas burning issue. In an effort to maintain fairness to previous owners, there was code written to allow for owners of Vether V1 to upgrade to Vether V2."

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 - VETHER V1 Blurr Exploit

Date	Event	Description
June 20th, 2020 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

No funds were lost.

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

There were no losses in this exploit.