A hacker hacked a liquid pool exchange machine on the Allbridge Core stablecoin bridge, stealing $1.66 million worth of assets over the weekend.
In a post-mortem in that case, Allbridge says the hacker used credit and damaged Solana’s mind (SOL) liquidity pools.
The attacker borrowed $1.12 million worth of the dollar-denominated stablecoin USDC from the lending process, then exchanged USDC to stablecoin USDT.
The hacker did a series of “same exchange transactions,” exchanging 100,000 USDT for the same stablecoin.
Allbridge notes that the switching method enabled the input and output of the same signal as the others.
“Because both sides of the exchange of the same stock are based on the same pool, the calculations of the two parts differed, and each iteration made the internal prices of the pool inconsistent with reality.”
After heavily manipulating the value of Tether’s stablecoin in the liquid pool, the hacker was able to exchange just 4,000 USDT for 2.24 million USDC. The attacker then returned the loan to Flash and kept the remaining 1,118,239 USDC and 538,692 USDT, which is about $1.66 million worth of stolen crypto.
Allbridge says the safety net of the liquid pool was “established by default,” making the balloon’s cost effective before it even started.
The stablecoin bridge has resumed operations that do not rely on staking pools but has announced plans to stop doing swaps. The service also claims to have recovered $1.63 million in stolen funds, which were transferred from Solana to one Ethereum (The price of ETH) address combination and move in multiple directions.
Allbridge also notes that no user wallets, private keys or non-pooled methods of the bridge were affected by the incident.
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