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- 1 Gamma Protocol recently witnessed an exploit of $3.4 Million.
- 2 Gamma Strategies Ethereum-based asset management protocol trying to negotiate with hackers.
- 3 Gamma native token dropped by 50% after the incident occurred.
The crypto industry has witnessed another Hacker attack. The DeFi protocol Gamma Strategies recently suffered an exploit of over $3.4 Million where attackers drained out 211.9 Ether
The attack was first discovered by the blockchain investigator PeckShield on January 4 and in the investigation, they found that it involved Gamma Strategies.
Afterward, the decentralized finance protocol confirmed the incident on the social media platform X. However they confirmed to their users that they could draw back their funds any time they needed.
As per the post of Peckshield, a blockchain security firm, the hackers exploit the vulnerabilities in its Ethereum-based liquidity vaults and withdraw more funds than they deposited. The hackers used the transactions to manipulate the Gammas native tokens’ price and inflate their withdrawal amount.
After the incident, the Gammas native token dropped by almost 50% as the investors panicked and lost confidence after the attack.
Gamma Strategies’ Response to The Hack
Gamma Strategies froze the deposits to prevent their losses however vaults are still running for the users.
Moreover, the company said they were working with Peckshield and other security experts to investigate the incident and recover the funds. The platform also assures they will take measures to prevent future attacks.
The platform recognized the flaw that permitted the hackers to break the safety mechanism and alter the transaction’s price data. Before the platform restricted the deposits, hackers had already washed out $2 Million via Tornado Cash Mixer, according to PeckShield.
Gamma also did something out of the box – the company sent a message to the hacker’s wallet address asking to negotiate a bounty with them.
The message was “Hello, we are reaching out to you from Gamma. We noticed that you found a bug, and we want to thank you for discovering it. We hope you did so with a white hat or grey hat. We want to open up communications regarding bug bounty. Please email us at: [email protected]”
In a reassuring tone, the company assured the public that halting deposits for its public-facing vaults had already rendered the attack ineffective, as a deposit is necessary for the attack to occur.
The protocol outlined the steps it would take to address the issue moving forward, including conducting a third-party code review to ensure the attack is fully mitigated before reopening deposits.
The company expressed its commitment to recovering all affected funds and apologized to those affected, promising to release a more detailed analysis and remediation plan shortly.
The defi platforms are vulnerable to code exploits and flash loan attacks Gamma Strategies is one of several victims over the past few years. Defi users and developers should take precautions to protect their funds and data from these attacks.
Disclaimer
This article is for informational purposes only and does not provide any financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your own research before making any financial decisions.
Steefan George is a crypto and blockchain enthusiast, with a remarkable grasp on market and technology. Having a graduate degree in computer science and an MBA in BFSI, he is an excellent technology writer at The Coin Republic. He is passionate about getting a billion of the human population onto Web3. His principle is to write like “explaining to a 6-year old”, so that a layman can learn the potential of, and get benefitted from this revolutionary technology.
