Synthetix Lost 37 Million sETH in an Oracle Attack

Cryptocurrency company Synthetix has suffered an oracle attack, resulting in the loss of 37 million synthetic Ether (sETH).

First pointed out by The Block, the loss of the synthetic crypto startup can be verified on Etherscan. However, due to the relative liquidity of sETH in the secondary markets, the fiat value associated with the loss cannot be calculated.

Kain Warwick, co-founder, and CEO of the company, believes that the attack was carried out by an arbitrage bot, and the company has already contacted the owner of the bot.

“There has been an incident with the price feed of sKRW, we are currently investigating the root cause, but during the time when the price feed was returning the wrong value, we believe an automated arb bot converted into sKRW and then into sETH,” Warwick noted in a statement on Synthetix’s Discord channel.

Encouraging hackers to beat other hackers

Amid the attack, the company has terminated all transfers within its networks as it has complete control over its smart contracts. It also initiated a bug bounty program to encourage white hat hackers to report bugs on the platform.

The move can be justified considering the growing popularity of bounty programs on 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 platforms. Last month, Finance Magnates reported that white hat hackers had raked over $32,000 by reporting bugs in various blockchain platforms in a mere seven weeks. Coinbase even rewarded a hacker $30,000 for reporting a critical bug on the exchange, totaling its payout at over $300,000.

Making of synthetic crypto

Synthetix allows its users to mint synthetic Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term on Ethereum’s blockchain. The coins can also be traded on a peer-to-peer platform. The compromised sETH tracks the price of Ether using an Oracle-backed price feed. Earlier this year, the company also launched a synthetic Bitcoin on Ethereum blockchain which can be traded on the Synthetix exchange.