VETHER V2 JasonTheMerchant Exploit
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Vether is a stablecoin minted from Ethereum.
The protocol was upgraded to improve the minting process.
However, this upgrade process had a vulnerability, which would have allowed someone to take assets. This led to a protocol upgrade.
This is a global/international case not involving a specific country.
About Vether
Vether is a "strictly-scarce Ethereum based asset." "Vether is designed to be a store-of-value with properties of strict scarcity, unforgeable costliness, and a fixed emission schedule." It describes itself as "[a]n asset that stores value created by dreamers and builders. With limited supply and with technical properties that allow for even fairer distribution and transparent costs."
"There will only be 1,000,000 Veth ever." "No one can control it and there’s no blacklist. Every day a portion gets released to whoever burns Ether for it. This mechanism is called Proof-of-Value." "Every Veth in the world was paid for by Ethereum."
"Vether’s still in its infancy and its beauty is in its simplicity. At the same time, as with every major crypto (ETH, BTC, etc.), it has its share of growing pains."
After the Blurr exploit, "the plan was to release a new asset (Vether V2) that removed the ability to burn ERC-20 tokens." "With an effort at fairness, Strictly-Scarce added an upgrade feature where you could send your Vether V1 and in essence trade it for Vether V2 as long as you were in the owner’s snapshot taken."
"A member of the Vether Discord community, JasonTheMerchant, wanted to see if there was a bug and found one. Because of a missing underscore, “_”, someone could potentially claim that full amount set aside for upgrading. This would require burning for Vether V1 contract over a few days, but once an owner in the snapshot did this, they could claim everything unclaimed by the V1 owners. The countdown clock was on."
"Despite calls to the community to upgrade, there were still more than 10,000 Vether V1 left to be upgraded. There was still a chance someone could claim 10,000 Vether V1 within the week and take the remaining un-upgraded Vether V2. Although the only people who could exploit this were owners in the snapshot, the community felt the risk was not worth it both due to the large outstanding amount and also the desire that folks would not lose what was rightfully theirs."
"This led the community to ask Strictly-Scarce to create V3, a version without burning but with the ability to still upgrade with the proper constraints in place."
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 |
|---|---|---|
| June 24th, 2020 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?
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
It is unknown how much was recovered.
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?
Prevention Policies
There were no losses from this exploit.
References
Vether Contract Upgrade (Jul 13)
What is Vether? - Vether (Aug 14)
Vether - A strictly-scarce Ethereum based asset. (Jul 12)