DeFi Protocol pNetwork Hacked, $12.7M Worth Bitcoins Were Stolen

pNetwork, which is a cross-chain decentralized finance (DeFi) platform, has fallen victim to the latest cyber attack on crypto space as the protocol reported around $12.7 million worth of Bitcoin.

The developers of the DeFi protocol officially announced the attack on its platform that resulted in the theft of 277 BTC, most of which were stored with it as collateral.

1/N We're sorry to inform the community that an attacker was able to Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term a bug in our codebase and attack pBTC on BSC, stealing 277 BTC (most of its collateral).

The other bridges were not affected. All other funds in the pNetwork are safe. — pNetwork ? (@pNetworkDeFi) September 19, 2021

pNetwork is one of the many rising DeFi protocols that bridges different blockchains, thus overcoming the compatibility issues of the decentralized technology. It allows users to mint pBTC, a wrapped Bitcoin, by depositing Bitcoin to the protocol. pBTC then can be used as a substitute for Bitcoin on any Ethereum Virtual Machine compatible Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term.

According to the official statement, the team behind the protocol has already identified the bug that resulted in the security breach and is ‘working on fixing it’. However, it did not detail much about the attack.

Interestingly, the team has offered the hacker a bounty of $1.5 million if the siphoned funds are returned but believes it is a long shot.

“Finding vulnerabilities is part of the game, unfortunately, but we all want DeFi ecosystem to continue growing, returning funds is a step in that direction,” the team’s official Twitter handle posted.

5/N Status update: we have a proposed fix and we are now waiting for everyone to review it. We expect for the bridges to be back up in approximately 12 hours. We want to reassure everyone that we are prioritising security over speed.

— pNetwork ? (@pNetworkDeFi) September 19, 2021

However, the team did not announce its plans to reimburse the affected users.

Imperfect DeFi

DeFi brings together the financial products and decentralized technology and is seen as the real challenger to the existing banking system. Despite the massive potential, the industry is still in its infancy, and even popular protocols are vulnerable.

Only a few weeks ago, DeFi lending and borrowing protocol Cream Finance was siphoned off $25 million worth of multiple tokens, mostly AMP. Other major DeFi hacks include the two consecutive security breaches of ThorChain that drained a total of $15.6 million.