Spartan Protocol Hack

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Spartan Protocol

Spartan Protocol is yet another audited smart contract that did something stupid. A lot of people lost a lot of money in this case.

It appears that the Spartan community has plans forward to rebuild through a new token, with the old tokens swapped one for one with the new tokens.

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

About Spartan Protocol

"Spartan Protocol operates as a community-driven project with a broader number of contributors. The platform is home to various functionalities such as granting liquidity to assets, developing lending markets, and synthetic assets." "Similar to the Ethereum-based Synthetix, the Spartan project aimed to create synthetic tradeable assets that reflect the value of other assets." "The Spartan Contracts were fully audited by Certik prior to launch, along with the usual ongoing code reviews, so this is an unfortunate reminder that there are no 100% safeguards."

"A bug in Spartan Protocol’s code used current balances instead of cached balances (like Uniswap does) in order to calculate the value of LP tokens. This allowed an LP token to break up into more composite tokens than is correct since the pricing received by the protocol was incorrect." "The exploit was possible because Spartan used current balances instead of cached balances (like Uniswap) to calculate LP tokens value."

"The hack emerges from a miscalculation of the liquidity shares whereby a digital token in a pool is burnt to obtain the specific asset. In essence, the perpetrator intends to acquire a massive amount of assets by increasing the pool’s asset value before burning a similar amount of pool tokens." “In particular, the specific hack inflates the asset balance of the pool before burning the same amount of pool tokens to claim an unnecessarily large amount of underlying assets. The consequence of this attack results in more than $30M loss from the affected pool.”

"The Spartan Protocol tweeted about the exploit four hours after it took place, by which time the hackers had already withdrawn part of his profit using Anyswap." “This suggests that the attacker chose a perfect time, which did not allow the team to react in time” "Spartan Protocol claims to have ‘no investors, no team tokens, and no treasury,’ stating that the team’s personal funds were backstopping liquidity in the protocol and that those funds were stolen as well. They are currently working on rebuilding from the ground up, claiming that they will ‘rebuild the shield wall’ free of bugs or exploitable code." "In keeping with the Spartan theme; we may be bloodied but we are not beaten and are very far from out of this fight."

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 - Spartan Protocol Hack

Date	Event	Description
May 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 $30,500,000 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

Decentralized smart contracts operate like hot wallets in that they are online systems which are directly connected with the ability to send tokens.

These do not guarantee the security of funds. A more secure setup would use a multi-signature wallet with keys stored offline. This is, of course, a different model from the standard decentralized one.

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.