Getting In On The Action
Market Meditations | June 10, 2022
A reddit user, with a now deleted post, first warned of an Osmosis vulnerability. He discovered that if someone added funds to an Osmosis liquidity pool and removed it, the position would increase by 50%.
- Users were able to drain $5 million of liquidity before the developers halted the chain.
- In an interesting twist, Firestake, a validator on the Osmosis chain, admitted that upon discovering the bug they joined in on the exploit, draining $2 million with only a $226 position.
- A validator is a computer that maintains the integrity of the blockchain. They had to stake a large amount of Osmosis to even be selected, which will be less valuable now.
- After contacting the Osmosis team, Firestake took to Twitter to confess their sins to the community and announced that they would be leaving the Cosmos ecosystem.
- The official Twitter account for the Osmosis dex said this bug was due to a software error in their recent upgrade to Osmosis V9.0 that went live only one day before the exploit.
- Osmosis has stated that it will replace any funds that are not recovered from their treasury.
Developers can make mistakes that are often very costly to speculators and community members alike, but it isn’t every day that validators of the chain jump in on the exploitation. Hopefully, this type of behavior doesn’t become a statistic of what to expect in a bear market!
