Value DeFi Fire Sale

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Value DeFi

ValueDeFi had previous issues in August 2020, November 2020, and again 2 days prior.

They haven't yet proposed compensation for this latest attack.

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

About Value DeFi

"Before rebranding, the DeFi space knew Value DeFi as YFValue (YFV). The project was inspired by the Yearn Finance protocol, a platform designed exclusively to cater to yield farmers."

"Value DeFi is a compilation of products and services for the decentralized finance sector that brings innovation and fairness to the community. This project’s main goals are to increase accessibility to yield farming, provide on-chain governance voting, reward stakeholders with flexible yield strategies, and protect user funds through insurance treasuries." "The Value DeFi suite contains five unique products and services."

"[T]he AMM called vSwap from @value_defi is in trouble." "vSwap is an automated market maker product created by Value DeFi that utilizes smart routing to provide the best rates possible for token swaps. Traders can swap tokens while experiencing low slippage rates and minimal price impact no matter what size they are trading."

"The attacker fisrtly swap 0.05 WBNB for vBSWAP token. [T]he attacker make a flashloan, so vSwap contract will transfer the vBSWAP token and WBNB to the attacker. Before completing the entire exchange process and updating the amount of tokens in the pool, different algorithms will be selected according to whether the tokenWeight0 parameter of the pool is 50 to check whether the amount of tokens in the pool meets expectations. Since the tokenWeight0 parameter of the vSwap contract is set to 70, the second algorithm will be used to check the amount of tokens in the pool. The key point of the vulnerability is that when the second algorithm is used for inspection, the inspection can be passed through specially constructed data."

"The second algorithm is checked by calling the ensureConstantValue function of the formula contract and passing in the amount of tokens cached in the pool and the amount of real-time tokens. After specific analysis and debugging of this algorithm, we can find that when using WBNB to exchange the smallest unit (ie 0.000000000000000001) vBSWAP, a huge fluctuation range is allowed between the WBNB value cached in the pool and the real-time value. This algorithm check within this range will pass. Therefore, the attacker can transfer to WBNB to exchange the smallest unit of vBSWAP tokens, and at the same time lend a large amount of WBNB tokens in the pool through flash loan."

"Due to algorithm problems, they can still pass vSwap check without repaying the flash loan. The attacker only needs to repeat this process continuously in all vSwap pools to steal the liquidity in the pool and complete the profit."

"About $11M was stolen today from non 50/50 pools, in addition to $6M already lost this week as a result of contract reinitialization."

"Value DeFi is a trainwreck." "Six months ago they lost $7M. Three days ago they lost $10M." "Now they’ve lost another $11M."

"The incident was due to the improper use of a complex exponentiation power() function behind the calculation and enforcement of the weighted constant product invariant."

"The very first part of our compensation is live. Please refresh the website to claim your missing tokens."

"Value DeFi is a prime example of how developers can survive in the blockchain industry even if they face several challenges and hardships throughout the production process. Despite the fact that it is not yet a serious competitor, it is still worth observing the project’s growth over the past year and its potential future."

"[T]he native token of Value DeFi has recovered somewhat since the latest exploit. However, Nansen shows us that the DEX volume has been decreasing consistently."

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 - Value DeFi Fire Sale
Date	Event	Description
May 7th, 2021 12:00:00 AM	First Event	This is an expanded description of what happened and the impact. If multiple lines are necessary, add them here.

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?