- BonqDAO was exploited and lost $120 million worth of digital assets.
- $BEUR and $wALBT witnessed a significant drop in price value since the exploit.
- AllianceBlock stated that it would remove all liquidity on BonqDAO.
BonqDAO, a decentralized autonomous organization that provides its customers with interest-free self-sovereign financial services, has recently experienced a loss worth $120 million.
On February 1, Bonq protocol announced on its Twitter page that it had lost millions of dollars due to an oracle hack. According to the tweet, the exploiter had inflated the price of the ALBT and minted large amounts of BEUR (bonq euro).
“Bonq protocol was exposed to an oracle hack, where exploiter increased the ALBT price and minted large amounts of BEUR,” Bonq announced on Twitter.
According to PeckShield, a blockchain security firm, the hacker conducted several transactions, which included 98.65 million BEUR tokens worth $108 million, and 113.8 million wALBT (wrapped ALBT) tokens worth $11 million.
The transactions made by this exploiter reduced the price of the BEUR and wALBT tokens to less than 30% and 50%, respectively. Upon noticing the oracle hack, BonqDAO explained that the exploiter had made multiple transactions since minting the BEUR tokens.
The liquidation of ALBT (Alliance Block Tokens) troves was triggered when the minted BEUR tokens were swapped for other tokens on UniSwap, further decreasing the price of the BEUR to nearly zero.
How did it happen?
Beginning the new month with a heist on the blockchain, the BonqDAO hacker altered the oracle price function in one of the DAO’s smart contracts and, in doing so, gained the ability to manipulate the price of the wALBT (wrappedALBT) tokens.
In a chain of events, the hacker exploited the BEUR and wALBT tokens, swapping $500,000 worth of BEUR for USDC on UniSwap and burning the 113.8 million wALBT for ALBT.
Spreek, an on-chain security observer, also expressed his thoughts about the oracle hack, being one of the first people to notice the exploit. He stated that the hacker dumped more BEUR tokens for ALBT tokens and sold 3 million ALBT for 144 ETH.
BonqDAO and AllianceBlock appease their affected users
Since the hacker made away with $120 million, BonqDAO and AllianceBlock have both followed up on the situation by alerting the crypto community of their plans moving forward.
Bonq claimed that all other troves were unaffected as it had paused its protocol. On a lighter note, the decentralized autonomous organization affirmed that it was working on a solution enabling its users to withdraw the remaining collateral without having to repay BEUR (bonq euro) in the troves.
AllianceBlock was also vocal about the exploit as it confirmed the tragic news of the stolen funds. The issuer of the ALBT tokens announced that none of its smart contracts was breached or compromised in the exploit. All connected partners and Bonq teams were removing the liquidity and suspending all exchange trading.
“We have paused all activity on AllianceBlock Bridge in the meantime,” AllianceBlock tweeted.
Conclusion
BonqDAO was welcomed into the new month with an oracle hack exploit, losing $120 million to a hacker. The decentralized autonomous organization has since paused its protocol and promised to work on a recovery solution.
