DeusDao Muon Price Manipulation Hack

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DEI Stablecoin

Muon was being used to detect SWAPS within a solidly pool, but efforts were underway to enhance it by adding more sources and filtering transactions. The attacker manipulated Muon's VWAP price by falsely swapping ~2 million USDC for 100,000 DEI in an unconventional way. They also employed a flash loan to manipulate on-chain prices, taking advantage of Muon's use of only one DEX as a source. However, it wasn't a typical flash loan attack but something more sophisticated. Fortunately, no users lost money; the protocol absorbed the loss, and it will be covered through veDEUS. Efforts are being made, in collaboration with centralized exchanges and other entities, to recover the funds.

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

About DeusDao

"Muon is checking for SWAPS inside of solidly pool, we were working on changing that together with muon to add more sources and filter out transactions..."

"The attacker used some strange way of swapping, I am still looking into that. Basically "faking" a swap of ~2M USDC to 100k DEI, he manipulated the Muon VWAP price with it."

"Then the attacker used a flash loan to manipulate onchain price, as we are checking MUON > OnChain against the other."

"IT WAS NO FLASH LOAN ATTACK. it was something more sophisticated, only possible through abusing the fact that Muon only used ONE DEX as source, in the next upgrade that wouldn't be possible anymore"

"No user lost any money, the loss is on the protocol. Which we will cover through our veDEUS going forward."

"We are working together with Teams from CEXs and other agencies to recover the funds."

"The dev team is working on the DEI situation.

1. User funds are safe. No users were liquidated. 2. DEI lending has been temporarily halted. 3. $DEI peg has been restored."

"Closing in on the hacker @binance has frozen the assets of the suspected hacker's account as the investigation has officially commenced.

An action-fraud case has been opened with England's Cyber Action Fraud Police regarding the recent exploit."

"After scrutiny, the Foundation believes the DEUS Finance Eulogy initiative for restoration and stabilization of the fUSD peg is worth considering. Please vote to either support or oppose this plan."

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

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• 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

"DEUS Finance AMA with 0xDAO 20 April" https://www.youtube.com/watch?v=6A4ex6Lu8bY

Key Event Timeline - DeusDao Muon Price Manipulation Hack

Date	Event	Description
April 27th, 2022 8:36:00 PM MDT	Fantom Transaction	The price manipulation transaction happens on the Fantom blockchain.
April 28th, 2022 4:28:00 AM MDT	Twitter Acknowledgement	lafachief of Deus reports on the attack with the transaciton and some details of what happened.
April 29th, 2022 10:00:00 AM MDT	Closing In On Hacker	According to a tweet by DeusDao, they are closing in on the hacker.
April 29th, 2022 12:47:00 PM MDT	Fantom Foundation Tweet	The Fantom Foundation shares a tweet to vote on supporting a restoration of the fUSD peg.

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

The total amount recovered is unknown.

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.