Level Finance Gets Leveled
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Level Finance is a decentralized perpetual exchange that offers innovative liquidity solutions and risk management for BTC, ETH, BNB, and stablecoins. Recently, the platform suffered an attack where $1.1 million in referral rewards were stolen due to a bug in the LevelReferralControllerV2 contract, allowing for repeated reward claims to be processed. The attacker used flash loans to create referrals and increase their reward tier, draining 214k LVL tokens, which were swapped for 3,345 BNB. Losses were contained to the referral program, with Treasury funds and LP remaining safe. The funds remain in the attacker's address.
This is a global/international case not involving a specific country.[1][2][3][4][5]
About Level Finance
"On-Demand Liquidity Meets Bespoke Risk Management. A Decentralized Perpetual Exchange with Functional Risk Management and Innovative Liquidity Solutions."
"Maximize Your Strategy. Manage your exposure with just 1/50th collateral. Best in kind perpetual AMM with virtually zero slippage and low fees."
"Leveraged Trading. Innovative liquidity solution for BTC, ETH, BNB, and stablecoins."
"Programmable Risk. Define your risk. Level offers an innovative user-elected credit exposure framework for liquidity providers."
"Complete Transparency. No custody, no accounts. Level is designed to be permissionless. Fully transparent open source smart contracts on BNB Chain"
"Real Yield. Revenue from trading and lending generates income natively in the cryptocurrency transacted."
"Decentralized Leadership. First of a kind user owned decentralized perpetual exchange."
"[An] attack was initially attempted over a week ago, but it seems nobody noticed."
"Yesterday, $1.1M in referral rewards were robbed from the BSC-based perps platform."
"The alarm was raised by definalist (whilst the attack was still ongoing) and confirmed two hours later by the Level Finance team."
"Luckily, the losses were contained to the project’s referral programme, with Treasury funds and LP both safe."
"The hacker dumping LVL tokens for BNB initially crashed the price by 65%, though this has mostly recovered since."
"Level Finance’s LevelReferralControllerV2 contract contained a bug which allowed for repeated referral reward claims to be processed within the same epoch."
"The exploiter prepared the attack by creating many referrals and using flash loans to make swaps, thereby increasing their reward tier."
"In total, 214k LVL tokens were drained by the exploiter, who swapped them for 3,345 BNB, worth approximately $1.1M at the time of writing. The funds currently remain in the attacker’s address."
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.
| Date | Event | Description |
|---|---|---|
| May 1st, 2023 11:50:41 AM MDT | Malicious Transaction | One of the attacker transactions occurred. |
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 has been estimated at $1,802,000 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?
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.
References
- ↑ Rekt - Level Finance - REKT (May 3, 2023)
- ↑ Level - Decentralized Perpetual Exchange (May 3, 2023)
- ↑ @Level__Finance Twitter (May 3, 2023)
- ↑ @Level__Finance Twitter (May 3, 2023)
- ↑ Binance Transaction Hash (Txhash) Details | BscScan (May 3, 2023)