ANTIMatter Finance ChainSwap Breach

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ANTIMatter Finance

AntiMatter Finance is a service which simplified derivatives trading. Their token used ChainSwap to exist on multiple blockchains, which required some funds to be stored in the smart contract hot wallet.

The ChainSwap bridge was hacked, and the attacker was able to obtain the tokens, which were sold. AntiMatter Finance plans to issue a new token, to replace the hacked token.

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

About ANTIMatter Finance

"The gateway for DeFi derivatives & financial NFT’s. Antimatter powers an ecosystem of on-chain financial products. Create and trade tokenized perpetual options in a permissionless environment across major blockchains."

"Antimatter enables traders to speculate on future prices of cryptocurrencies by utilizing on-chain financial derivatives, called perpetual options. These tokenized perpetual options can be created and traded on the Antimatter platform."

"The indicator price is based on the ratio between call and put options and determines the price of the tokens. Differences between the indicator price and spot price create arbitrage opportunities for investors."

"[H]ave you heard or traded the bull and bear tokens on centralized exchanges such as Binance? The idea of the bull and bear token is that its price is pegged to the target asset, and the price will move to a larger extent of the larger asset."

"For example, BTCBULL token will increase by 3 USD if BTC increases by 1 USD. The nature of these tokens is that they are leverage embedded and there is no liquidation unless you decide to sell tokens at a loss. But the issue with the bull and bear tokens on centralized exchange is that there is no underlying asset behind them, and the market can be heavily manipulated. This is where Antimatter comes in."

"We appreciate the way bull and bear tokens work and we believe it is a good way to reach large audience who are not professional traders but want to get more exposure to price movements. Also, the tokenized leveraged token makes it easier for people to use in the DeFi ecosystem. Such trading derivative experience is revolutionary and completely different from the traditional derivative trading."

"Antimatter borrows its advantages and brings it to DeFi environment with robustness. The product of Antimatter will be tokenized leverage token backed by an underlying asset."

"ChainSwap is a bridge protocol that links the Ethereum and Binance Smart Chain (BSC) blockchains." "It supports Binance Smart Chain, Ethereum, Polygon, and Huobi Eco Chain." "The ChainSwap hacker identified and exploited a vulnerability in the ChainSwap smart contract. This vulnerability enabled them to steal and mint new tokens for various protocols that were using the bridge to trade across Ethereum and BSC."

Investigation by ChainSwap revealed "a bug in the token cross-chain quota code. The on-chain swap bridge quota is automatically increased by the signature node, which is intended to be more decentralized without manual control. However, due to a logical flaw in code, this led to an exploit by allowing invalid addresses which weren’t whitelisted to automatically increase the amount."

"On Saturday, July 10th, 2021 at 20:47 UTC, there was a vulnerability exploit in the ChainSwap protocol that impacted MATTER token holders." The "exploit in the ChainSwap protocol impacted MATTER tokens on both Ethereum and Binance Smart Chain. [The h]acker was able to mint MATTER tokens from the Bridge Contract. Trading of the MATTER token on centralized and decentralized exchanges was massively impacted."

"The attacker managed to take control of the projects’ BSC contracts by exploiting ChainSwap. The attacker minted tokens directly to their address, then sold them on BSC’s most popular decentralized exchange, PancakeSwap." "[T]he attacker used the PancakeSwap exchange to convert the stolen tokens to WBNB, DAI, and other tokens."

"AntiMatter team made an announcement about a new token snapshot and withdrew Uniswap liquidity to prevent the hacker from getting away with more funds'"

"Chainswap said it had already repurchased a small amount of the affected tokens from the market and returned the contract wallet. The rest will be paid out in full by the Chainswap vault." "ChainSwap team has now prepared and executed a compensation plan in consensus with the affected projects." "In order to bring everybody a more rigorous, efficient bridge, the next development model of ChainSwap will be adjusted to ensure maximum safety."

"For now, Chainswap has temporarily closed its cross-chain bridge." "ChainSwap worked with the police and OKEx to identify the attackers, and managed to negotiate the recovery of Corra and Rai tokens. An initial email with the attackers suggested the attackers return $1 million."

“Sorry for the trouble, you sound genuinely like great people but money is money,” the attackers of the earlier exploit told ChainSwap.

"MATTER holders will be airdropped the exact amount of tokens held prior to Chainswap being hacked. This includes MATTER holders on centralized exchanges. BSC and HECO holders will be airdropped on Ethereum. The snapshot is taken at the block height: 12801461 (Timestamp: (Jul-10–2021 07:16:11 PM +UTC))."

"Due to the Antimatter token being issued through the Chainswap factory contract, we needed to issue a new token to detach from the bridge. The snapshot is taken at the block height: 12801461 (Timestamp: (Jul-10–2021 07:16:11 PM +UTC))."

"This means that MATTER holders will be airdropped the exact amount of tokens held prior to Chainswap being hacked. All the MATTER holders on exchanges will get their old tokens redeemed to match the amount at the time of the snapshot."

"For all Binance Smart Chain and Huobi Eco Chain holders impacted, they will receive the equal amount of MATTER they had before the Chainswap hack on Ethereum. This will ensure no permanent loss of your non-Ethereum balance prior to the attack. Due to large token holders, the token airdrop will is expected to take days."

"ChainSwap is excited to announce that we have successfully integrated with Anyswap and Chainswap bridge is now live. We thank our community for its patience during the last few weeks."

"Antimatter tweeted that a snapshot has been taken of all Matter holders and LP, and a 1:1 airdrop of new Matter tokens will be made, including Matter holders of the exchange platform."

"To show that the dedication and belief in our project is stronger than before, now that we have learned from the recent situation and taken measures to improve the protocol’s security, the Antimatter team has decided to increase the lock-up for the team tokens with two more years."

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 - ANTIMatter Finance ChainSwap Breach

Date	Event	Description
July 11th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost is unknown.

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?

General Prevention Policies

Theoretically, decentralized finance will eventually result in hackers having exploited every vulnerability that exists. However, it's impossible to know when that will occur and if a contract is truly secure, as opposed to there still being an exploit that just hasn't been noticed yet. For any complex smart contract, it's impossible to prove security and plenty of fully audited contracts have been exploited.

In this situation, there was luckily not much taken, and it looks like it will be ultimately reimbursed. Platforms should, generally, be prepared for the full loss of all assets stored in hot wallets (including smart contracts). Assets that do not need to be accessed quickly should be stored securely in a simple offline multi-signature wallet.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.