Charge DeFi Flash Loan Attack

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Charge DeFi

Charge DeFi suffered a Flash loan exploit to one of their smart contract hot wallets for new 60/40 vaults. This was apparently the same exploit as occurred with Grim Finance. They've reimbursed more than what was lost to all affected users, replacing the tokens and providing 50 BUSD per lost Charge.

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

About Charge DeFi

"ChargeDeFi is a new platform launching on BSC combining a traditional Algorithmic Stablecoin (pegged to $1.0 BUSD) with rebase mechanics. Featuring an extensive ecosystem of smart reinvestment pools, bond pools that yield below peg and multiple boardroom options ChargeDeFi enters BSC with a large set of investment options. Initially launching on BSC the next step will be multichain."

"Earn 4.9% daily! Stake your $Charge and $Static-BUSD in the boardroom to receive rewards through our Algorithmic Stablecoin ecosystem with rebase mechanics. Daily rate is subject to change, please read our gitbook before investing."

"Following the launch and our audit, Charge decided to add 2 auto-compounding vaults $Static-BUSD vault. $Charge vault."

"If an investor stakes into the $Static-BUSD vault 40% of that stake is swapped into $Charge and staked into the $Charge vault. Both vaults are auto-compounding. The $Charge vault additionally has a 48hr lock window and a 2 hour unlock window. During this unlock window the vault is compounded and investors can take out their earnings. After this window, the vault is locked again for 48 hours."

"These vaults are simple and so we decided to look around for these in other projects. We decided to fork from Grim.Finance for the 60/40 auto-compounding vaults, which had been audited by Solidity Finance and had a substantial TVL. In particular, the audit report states that reentrancy protection is in place."

On December 18th "at 07:12 UTC an attacker set up a flash loan for $Charge and abused the Charge vault on ChargeDeFi. 1849 charge was sold off. We're in contact with forensics agencies and the vaults have been paused." "Wallet balances are being gathered for a compensation plan afterwards."

"Only the new 60/40 vaults were affected! Other parts of ChargeDefi are unaffected!" "[W]e are extremely sorry for today's incident. We have put together a package that will help recoup the lost tokens."

"The exploiter managed to take out 2185.6 $Charge tokens at a value of $530 at the time of the exploit. It was traded for BUSD and then swapped to 955 WBNB. The value of this transaction was approximately $520k. The amount the attacker received for his $Charge was lower than the $1.16m value of the stolen tokens. This is due to limited liquidity. As the attacker sold off his tokens the price dropped fast."

"As soon as we knew the site was safe, informed possible targets and contacted investigation agencies, we moved on to a compensation plan to try and settle investors concerns. We considered various methods of compensation but had to consider the damage each route could put upon the ecosystem."

"Compensation: Full repayment of tokens plus $50 BUSD per Charge token lost." "ChargeDeFi builds a list of affected wallets and their lost Charge tokens, which is then shared with the community for cross-checking. Affected wallets will receive an equal amount of Charge tokens over a period of approximately 30 days. A special farm pool will be set up for this. This is a normal farm pool for wallets that have lost their Charge, not for other stakers. During this 30 day period, the farm will yield Charge that can be claimed at any time. After these 30 days all lost Charge will be compensated for. Affected wallets will also receive an airdrop of $50 BUSD per Charge lost, on top of regaining their original Charge." "The Charge used in this compensation method will be supplied by the project wallet. No extra Charge will be minted, the team has decided to supply this from the daily balance of Charge sent to the project wallet."

"The compensation pool for lost charge has just been released. The farm will start as soon as the start block is reached. Over a period of ~30 days Charge will slowly build up in this pool. You can claim at any time, also after the pool ends."

"Charge Defi has already dished out much of its 100+%compensation" "#ChargeDeFi is getting stronger and stronger with the help of our great community."

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 - Charge DeFi Flash Loan Attack

Date	Event	Description
December 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 $1,160,000 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

Our framework has two reviews prior to launch, which should come from independent experts. In the case of a smart contract, this would be different firms. However, it's important to understand that smart contract hot wallets can never be certain to be completely secure, and it's best to have most funds in cold storage protected by multi-signature authorization.