Base Blockchain Unverified Compound Fork Lending Exploited
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An unidentified smart contract on the Base Blockchain (which was originally derived from the Compound Finance protocol) was exploited through a price manipulation exploit. In total, $1m USD with of funds were lost. There is no clarity as to whether this protocol had a given name or how the development team may be assiting any affected users.[1][2][3][4][5]
About Base Blockchain
"Base is a secure, low-cost, developer-friendly Ethereum L2 built to bring the next billion users to web3."
"Secured by Ethereum: Base is built with the security and scalability you need to power your decentralized apps. It leverages the underlying security of Ethereum, along with Coinbase’s best practices, to enable you to confidently onramp into Base from Coinbase, Ethereum L1, and other interoperable chains.
Empowered by Coinbase: Base makes it easy to build decentralized apps with access to Coinbase’s products, users, and tools. Seamless Coinbase product integrations, easy fiat onramps, and powerful acquisition tools enable developers to serve the 110M+ verified users and to access $80B assets on platform in the Coinbase ecosystem.
Big features, small fees: Base offers full EVM equivalence at a fraction of the cost and is committed to pushing forward the developer platform. Set up gasless transactions for your dapps with easy developer APIs for account abstraction, and securely build multichain applications with easy-to-use bridges.
Open source: Base aims to be decentralized, permissionless, and open to anyone with the vision of creating a standard, modular, rollup agnostic Superchain powered by Optimism. We’re joining Optimism as a Core Dev on the open source OP Stack, and working to create a thriving community of other developers."
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
"Base chain detected a price manipulation attack targeting unverified lending contracts, where the attacker gained around $1 million in tokens through excessive borrowing."
| Date | Event | Description |
|---|---|---|
| October 24th, 2024 5:44:33 PM MDT | Base Blockchain Transaction | The blockchain transaction on the base chain. |
| October 24th, 2024 8:17:00 PM MDT | BlockSec Phalcon Tweet Further | BlockSec Phalcon posts an analysis of the transaction where they report that the project is a fork of the Compound smart contract. There are reportedly multiple markets being drained to a total value of $1m USD. They "suspect this may be a classic price manipulation attack caused by reliance on Uniswap's spot price." |
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 $1,000,000 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
"ALERT! Our system has detected a suspicious transaction targeting an unknown project on #Base, resulting in a loss of approximately $1M. The affected project appears to be a #Compound fork, with multiple markets being drained. As the contracts are not open-source, we suspect this may be a classic price manipulation attack caused by reliance on Uniswap's spot price."
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
- ↑ Base Transaction Hash (Txhash) Details | BaseScan (Accessed Nov 25, 2024)
- ↑ @Phalcon_xyz Twitter (Accessed Nov 25, 2024)
- ↑ DeFiHackLabs/src/test/2024-10/CompoundFork_exploit.sol at main · SunWeb3Sec/DeFiHackLabs · GitHub (Accessed Nov 25, 2024)
- ↑ Base (Accessed Oct 21, 2024)
- ↑ https://www.coinbase.com/en-ca/blog/introducing-base (Accessed Nov 25, 2024)