SafeDollar Stablecoin not Safe nor Stable: Hack Sends Value to ZERO
SafeDollar, a crypto token that’s pegged to the U.S. dollar, crashed this week. The team behind the Polygon-based stablecoin claim it had been hacked.
Or, at least, they claim there was a vulnerability that a hacker exploited. By repeatedly moving money in and out, the system got confused and drove up the price per share, only for the hacker to withdraw it all. That caused the cryptocurrency’s price to drop to $0, while the hacker got away with $250,000.
A naïve bug, or a malicious insider? In today’s SB Blogwatch, we prefer Bens.
Your humble blogwatcher curated these bloggy bits for your entertainment. Not to mention: I’m scared of popcorn.
Hack or Rug-Pull?
What’s the craic? Ed Browne reports—“SafeDollar Price Hits Zero Despite Being Stablecoin, Developers Blame Hack”:
Pegged”
The creators of SafeDollar, a cryptocurrency token designed to be stable in price, have claimed they were victims of a cyber attack after its price suddenly plummeted in value to zero. [The] team said the alleged hack … resulted in a loss of around $248,000 worth of tokens, which were drained from the SafeDollar network.
…
SafeDollar describes itself as a stablecoin—a type of cryptocurrency that has its price pegged to some other asset in an attempt to prevent price fluctuations. … Cryptocurrencies are notorious for their volatile prices and can often rise or fall by a significant amount in a 24-hour period.
And Andrew Asmakov adds—“Not So Safe: … attackers exploited an infinite mint vulnerability.”:
SafeDollar’s second major attack”
SafeDollar, a DeFi stablecoin built on the Polygon blockchain, plummeted to $0 … after an attacker exploited a vulnerability in its liquidity pool. … The team is yet to conclude its post-mortem.
…
This is SafeDollar’s second major attack since it launched earlier this month. 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.
That post-mortem? It’s not dead, Jim—“SafeDollar Post-Mortem Analysis”:
Thank you for your understanding”
The hacker … draw 16,626,185,544,882 and drain the liquidity pool to withdraw out 202,230 USDC and 46k USDT. Since PLX is a deflation token, every time user deposits to the pool, 0.15% of the amount will be burnt. The hacker kept deposit and withdrawing from the pool, so the PLX balance of the pool (lpSupply) was decreasing and became very small [so] accSdoPerShare became very big.
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The hacker … harvested that [very] big amount of pending SDO reward and dumped it into the liquidity pools. We are finalizing and will announce the Compensation … Plan in a separate article.
…
Thank you for your understanding.
“Understanding”? If people had understood it, they wouldn’t have held it in the first place. Or so aerovistae reckons:
Intentions to deceive”
There is no such thing as a stablecoin, it’s a made up term to try to lend legitimacy to new crypto scams. And I say this as someone who just bought some Ethereum in the hopes of making a profit.
…
I’ll be unreasonably specific: … The term stablecoin was made up with harmful intentions to deceive and mislead in order to make a profit off others’ losses.
Could you be even more specific? arglebargle_xiv utters the P-word:
Ponzi scheme”
“Hey, I’ve got a great idea. People are nervous about investing in other Ponzi schemes because the digital tulip bulbs don’t have any consistent value. What if we put the name ‘Stable’ in our one? Do you think the rubes would flock to our Ponzi scheme then?”
But what about all the true believers? Meet manquer’s Ponzi PoV:
Learning curve”
If they have drunk the cool-aid instead of just selling it, then they really believe in the ecosystem with faith that is unshakeable. All Ponzi scheme needs some level of that faith, without that it hard to sell to somewhat knowledgeable audience.
Some of this tech sure eventually will become mainstream in a lot less glamorous and likely more centralized way than crypto enthusiasts like to think. Current systems are not perfect certainly … however they also have the benefit of evolving over a long period of time and have gone through the learning curve all the coin markets are going through.
Horses for courses? Bert64 has a more nuanced opinion:
You’re an idiot”
It’s beneficial to have both regulated and unregulated financial systems: Regulated and stable is good for the essentials—receive your salary, pay your mortgage etc. It’s good to know that there are checks and balances so you won’t suddenly become homeless through no fault of your own.
Unregulated is good for risk takers … with spare cash. You might win big or you might lose big.
But if you put in more than you can afford to lose, you’re an idiot.
But what if it wasn’t a hack at all? s5300 alleges an insider pulled the rug and ran off with the money:
A 14 year old”
Seriously, this stuff is child’s play. … I literally mean some of these contracts that people are putting … dollars in are made, by the youngest I know of, a 14 year old.
Meanwhile, a slightly sweary AndyKron has zero sympathy for your zero balance:
Oops, you lost your money. Greedy mother******s.
And Finally:
Hat tip: “The internet’s longest-running, deepest-digging gossipmongers”
You have been reading SB Blogwatch by Richi Jennings. Richi curates the best bloggy bits, finest forums, and weirdest websites … so you don’t have to. Hate mail may be directed to @RiCHi or [email protected]. Ask your doctor before reading. Your mileage may vary. E&OE. 30.
Image sauce: Marco Verch (cc:by)
