PancakeHunny Contract Incident

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PancakeHunny

PancakeHunny is a yield farm aggregator, which suffered from a flash loan exploit involving price manipulation of tokens with lower liquidity. The attacker was able to make off with $1.9m. While none of the funds were recovered, Hunny is distributing funds to compensate those users who were affected.

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

About PancakeHunny

"PancakeHunny is a DeFi yield aggregator that offers users the most convenient way to farm their crops. It allows them to easily find the best yield farms and maximize their returns." "PancakeHunny aims to provide users the easiest way to join the bandwagon of the DeFi world, built on top of PancakeSwap, giving you the tastiest CAKEs topped with HUNNY. We support the underlying DeFi technology and ecosystem to compound user yields through the Binance Smart Chain (BSC). We have seen a huge surge in DeFi activity in 2020 since the rise of Yield Aggregator projects on different blockchain networks with existing protocols such as MakerDAO, Aave, Compound, and etc. As a Yield Aggregator with a vital role in the yield farming economy, we are leveraging different DeFi protocols and strategies to maximize user profits."

"PancakeHunny’s smart contracts are audited by Certik, one of the leading blockchain security companies in the industry."

"PancakeHunny suffered a flash loan attack that targeted the Hunny TUSD Vault." "On 20 October 2021, at 0920 UTC. A smart contract was created to exploit the Hunny TUSD vault. The Contract was subsequently executed 26 times." "The hacked transactions included 513 transfers, and Gas consumption reached 19 million, of which a large number of transfers were related to Alpaca tokens."

"This is the sequence of events. Obtained a 53.25 BTC Flashloan from Cream Finance. Used 53.25 BTC to get a 2,717,107 TUSD Loan from Venus. Manipulated the price of BNB/TUSD Pool on PancakeSwap. Used 50 different Wallet Addresses to Deposit 38,250 TUSD into HUNNY TUSD Vault. Redeemed 2842.16TUSD and Minted 12,020.40 Hunny. Sold Minted Hunny for 7.78 WBNB. Steps Repeated for 50 wallets 26 times."

"The hack is made possible due to a profit inflation bug, which converts the relatively small amount of harvested $ALPACA to large amount of $TUSD for staking. These converted TUSDs are then counted as profit, now inflated to mint large amount of $HUNNY!"

"PeckShield also detailed how the initial funds were channeled through Typhoon Network and Tornado Cash, and resulting gains were tunneled via CelerNetwork, Anyswap, and Synapse Protocol."

"We have stopped minting HUNNY for single asset vaults like FIL and TUSD Vaults with low liquidity on PancakeSwap. We have taken immediate action to protect our users from any further potential issues that could arise." "Funds in Hives are all SAFU. We have taken immediate action to protect our users from any further potential issues that could arise." "HUNNY tokens fell by about 70% in a short time."

"Pancake Hunny has identified the issue and will change the rooting to prevent the effects of price manipulation on LP pools." "We have identified the issue and we will change our routing to higher liquidity pools to prevent the aftereffects of price manipulation of LP pools. We will inform our community of a more detailed moving forward plan within 24 hours. Stay tuned."

"1.5 million $HUNNY (Dev Fund) will be distributed across users’ HunnyPlay account daily, over a span of 90 days based on the snapshot of your staked $HUNNY before the incident. We will have an accurate count of $HUNNY possessed by all HUNNY Holders from our snapshot. HUNNY Holders must have had HUNNY at the time of the incident and that amount is not sold until now."

"Daily payouts to compensation in your HunnyPlay account. You can see your available HUNNY amount to claim. When you claim, HUNNY token amount should be added to your HunnyPlay account balance." "To be able to claim your Hunny, you can simply connect your wallet to hunnyplay.com and subscribe to the compensation pool. Details will be announced before the subscription period starts. Do take note that you are free to withdraw $HUNNY from HunnyPlay or play with the credits."

"We will engage more external audits and security consultants for our current and future vaults from time to time as more audit reports can reveal other security weaknesses that we might overlook within our protocol." "Flash loan attacks are executed through smart contracts. Hunny will implement a stop on all external smart contracts to interact with Hunny’s contract which helps us mitigate the risk of flash loan attack with the same loophole."

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 - PancakeHunny Contract Incident

Date	Event	Description
October 20th, 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 $1,900,000 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.