Nimbus Platform Liquidity Attack

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Nimbus Platform

The Nimbus Platform is a set of several different blockchain-based strategies for DeFi participants. In order to use these tools, the Nimbus token is required, which could be purchased through their smart contract, which placed all funds in a hot wallet liquidity pool. Unfortunately, the liquidity pool had a small typo (missing zero) which allowed an attacker to drain the pool and steal the funds. After determining the cause of the drainage, the platform agreed to reimburse liquidity providers. No subsequent details could be located on the nature of the reimbursement.

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

About Nimbus Platform

"Your easy and efficient access point to the best of DeFi. 15 customizable earning strategies, reward calculators, and all market data in one spot let you benefit from the future of finance today."

"Nimbus has an ambitious plan to open some of the most rewarding DeFi functionalities to everyone. All of it within just one ecosystem and with increased efficiency due to decentralization."

"Our approach takes the best tools from traditional finance and combines them with the best practices of DeFi. The recipe targets the key shortcomings of both traditional finance and DeFi in a comprehensive manner."

"Earning with Nimbus is easy. Simply pick a strategy that suits you, calculate your estimated rewards with Nimbus calculators, and follow step-by-step guides to insert your assets and start receiving rewards."

"At the testing stage of the Nimbus smart contracts, no vulnerabilities have been identified. Moreover, the external technical audit also hasn’t identified any errors and confirmed that the Nimbus Platform is fully functional and safe."

"[T]he ETH/NBU pair’s liquidity on Uniswap has grown drastically throughout the past few days. With it, the NBU token has reached the next stage of its development and became extremely attractive for all market participants — including the malicious ones."

"The current situation is a result of an attack made by well-designed semi-automatic arbitrage smart contracts that have also been targeting tens of other promising crypto and DeFi projects. It took place at 3:15:17 am UTC, March 1."

An attacker "made the initiating transaction, inserting 1.994E-15 NBU to the ETH-NBU swap pair on Nimbus Swap."

"After that, there was a liquidity withdrawal from the ETH-NBU pair on Nimbus Swap in the amount of 516.9 ETH and 597712.9 NBU. Notably, this happened without the participation of the Nimbus LP tokens. Such tokens are issued to all Nimbus Liquidity Providers when they provide Liquidity at Nimbus Platform and are required for Liquidity withdrawal. But in this case, the liquidity has been withdrawn without the use of such tokens — and this is where the anomalies begin."

"Then, this process was repeated several times by other addresses."

"As a result, not only the NBU token value and the liquidity volume got affected by sweeping arbitrage activities — but also, 90% of liquidity from NBU pairs of the Nimbus internal Swap machine were withdrawn in several transactions."

"In order to calculate balance0Adjusted and balance1Adjusted in lines 405 and 406 of the Factory.sol contract, 10,000 bits must have been used — and this was done correctly. However, in order for the smart contract to be able to check if the new volumes correspond to the basic smart contract algorithm, the same 10,000 bits also must have been used in line 407. But as a result of an error, “1,000” bits were used there instead of “10,000”."

"As a result, this single missing digit allowed the malicious smart contracts to match its arbitrage attack with the further withdrawal of liquidity."

"[F]rom now on, we shall activate our warning system for Liquidity Providers that shall notify them when there are signs of similar arbitrage activities or any sort of attacks. It will help LPs to react timely and withdraw the liquidity in a synchronized fashion to deactivate the malicious party’s activity. It will also make sure their assets are safe."

"[W]hat our analytics have been struggling to understand is how could that smart contract achieve such results and deplete almost all liquidity in a matter of several minutes?" "Our analysis showed that even after the audit of the Nimbus smart contracts by Zokyo, there was a single zero missing. And as insignificant as it may seem, it has caused this situation to escalate a lot."

"First of all, the Nimbus team will reimburse liquidity to respective Liquidity Providers in full. You can be sure that we shall not let any malicious third-parties damage your well-being!"

"Second, the identified vulnerability has already been fixed. The new version of the smart contracts is published on our GitHub — hence the need for Nimbus Platform maintenance between 7 and 8 AM CET on March 4."

"Now that this maintenance is over, Liquidity Provider’s warning was removed. You can add your Liquidity to the Platform again and be at ease knowing that everything functions as it should."

"We are thrilled to announce that the Nimbus Bug Bounty program is about to kick-off! Those of you who find bugs in the Nimbus code before July 1 can receive Rewards from a Total Fund of 50,000 NBU!" "[W]e want to show our appreciation towards our bug hunters. So, we offer up to 50,000 NBU in rewards to up to 20 participants who succeed in this program."

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 - Nimbus Platform Liquidity Attack

Date	Event	Description
March 1st, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

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 $1,274,000 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

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?

General Prevention Policies

There are a number of ways to prevent and mitigate this situation. It is far more secure to have the majority of funds in a multi-signature wallet where keys are stored offline by multiple operators. This would limit the potential loss to only those funds being actively within the hot wallet. Audits can be used to reduce the risks on the hot wallets further, and we advocate at least 2 reviews would be required prior to a project launch. We also propose a comprehensive industry insurance fund which could be available to assist.

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.