SafeMoon, a DeFi protocol in the BNB chain fell to attackers who exploited a vulnerability in the burn mechanism.
On-chain sleuth Peckshield found that the bug was caused by a recent protocol change, which the hacker used to artificially boost the price of SafeMoon’s native token SFM and simultaneously sell enough Tokens back to the liquidity pool that WBNB withdrew from the contract.
In a subsequent tweet, Safemoon CEO John Karony explained that the exploit was exclusive to one LP on the BNB Chain.
“I want to make clear that our DEX is safe. This ultimately affected the SFM:BNB LP pool,” Karony said. “We have located the suspected exploit, patched the vulnerability, and are engaging a chain forensics consultant to determine the precise nature and extent of the exploit.”
A flaw in the burn feature of Safemoon’s smart contracts was pointed out by a few developers as a major factor in the exploit.
“The attacker took advantage of the public burn function, this function lets any user burn tokens from ANY other address (code attached),” the CEO of Dappd, DeFi Mark wrote on Twitter.
Shortly after the incident, the attackers said that they were prepared to speak and claimed that they had unintentionally front-run the attack.
The response has evoked mixed reactions as rumors of inside trading begin to circulate. This is due to the fact that since the project’s inception in 2021, it has been plagued with scandals.
BNB Team Announced Proposal To Increase Competitiveness
In April 2022, SafeMoon received backlash from community members when an investigator alleged that the protocol’s anonymous founder ‘Kyle’ copied the code of another smaller rug pull project called Bee Token.
That said, the Binance-linked BNB chain suffered a $566 million hack in late Oct which forced the team to halt the network temporarily.
As per the latest reports, BNB chain has introduced a proposal to adopt a reduced transaction fee cost on the network in order to increase competitiveness with other L2, which will allow users to choose fees below the current 5 gwei rate, with choices to go as low as 3 or 4 gwei.
This comes after Binance-CFTC FUD that has wiped out BNB’s March gains. The 4th ranked token lost 7% on the announcement day, logging its worst daily performance since Feb. 13.