Onyx Protocol, a DeFi platform built as a fork of Compound Finance, has lost $3.8 million in a recent hack. This attack adds to the growing list of security breaches within the crypto space.Â
Hackers Drain $3.8 Million from OnyxÂ
Blockchain security firm PeckShield was the first to raise alarms about suspicious transactions on OnyxDAO. They soon confirmed a $3.8 million loss, with hackers already swapping the stolen funds. Web3 security company Cyvers also verified the attack, noting that most of the stolen assets were VUSD stablecoins.Â
Investigations show that the hacker exploited a bug in the protocol’s code, which is based on Compound V2. The attacker siphoned 4.1 million VUSD, 7.35 million XCN, 5,000 DAI, 0.23 WBTC, and 50,000 USDT. The flaw allowed the hacker to manipulate exchange rates in a near-empty market.Â
This isn’t the first time Onyx Protocol has been targeted. In October 2023, hackers exploited a similar issue, stealing $2.1 million. Both incidents point to the same vulnerability—rounding errors inherited from the Compound V2 code.Â
A Common Problem in DeFi ForksÂ
Many DeFi platforms are open-source, meaning developers often build on existing code instead of creating new code from scratch. While this can increase efficiency, it also means vulnerabilities in the original code may be passed along to forked projects like Onyx.Â
Security experts note that these attacks were preventable. The crypto industry has seen similar exploits, and guidance on preventing such issues is widely available.Â
This attack follows another major incident this week, with Truflation, a decentralized infrastructure, losing $4.6 million to a similar exploit. These ongoing breaches underscore the urgent need for stronger security measures across the crypto industry.
