SafeDollar First Exploit

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SafeDollar

SafeDollar was backed by crypto-assets stored in a smart contract hot wallet, which even featured more than one vulnerability. They didn't see the value in an audit or bug bounty program.

Rather, their approach was to wait until the wallet was drained before coming up with a plan to reimburse investors from the dev fund.

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

About SafeDollar

"Stablecoins are a special type of cryptocurrency tokens that are pegged to certain fiat currencies, usually the U.S. dollar. They are designed to always retain the value of their corresponding assets and—in theory—should always be tradeable or redeemable in a one-to-one ratio." "SafeDollar launched its Decentralized Exchange Offering on its partner exchange PolyDEX on Jun. 14."

"The Next Generation Algorithmic Stable Coin On Polygon" "Inspired by and improved from all predecessors, we are pleased to present the next generation algorithmic stablecoin on Polygon. SafeDollar will be the first and only algorithmic stablecoin that combines unique features of seigniorage, deflation protocol and synthetic assets." "#SafeDollar [is] Powered by @0xPolygon and supported by @QuickswapDEX."

"With its unique tokenomics and combined features, we strongly believe that SafeDollar will redefine the algorithmic stablecoin concept and set a new standard on Polygon landscape." "In SafeDollar’s case, the stablecoin uses a combination of “unique features of seigniorage, deflation protocol and synthetic assets” as its basis."

"An attack on June 20 resulted in the loss of 9,959 SDS, the protocol’s share tokens, worth around $95,000 at the time." "The attack happened on Jun-20–2021 06:21:04 PM +UTC." The attacker "withdrew 9,959.26 SDS, then sold for 95,392 USDC after bridging all to Ethereum." "This incident only affects the IDO token sale which is using PolyDEX’s token lock contract."

"SafeDollar developers published a “Postmortem Analysis” about an exploit that resulted in the loss of the protocol’s 9,959 SDS tokens—worth around $95,000 at the time."

"SafeDollar team will use $100,000 USDC and SDS from Dev fund to provide back 9,959.29 SDS for IDO buyers to claim their SDS." "We will deploy the new contract, and IDO buyers will be able to claim all their remaining SDS at once, without the need of vesting anymore."

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 - SafeDollar First Exploit

Date	Event	Description
June 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 $95,000 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?

General Prevention Policies

The project stored all of the assets in a smart contract hot wallet. If most assets had instead been stored in an offline multi-sig, the attack would have resulted in significantly less impact.

Other steps the team could have taken would include a smart contract audit or a bug bounty program.

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.