Decentralized liquidity service provider, Sushiswap, has suffered another attack.
This resulted from the exploitation of a system flaw leading to a successful hack. The perpetrator made off with part of the platform’s fees for the day.
The SushiSwap Smart Contract Loophole
The system vulnerability was spotted on Badger DAO token DIGG. The hacker exploited a transaction that converted 0.05% of the DIGG/WBTC swap fees. The funds stolen amounted to 81 ethereum (eth) (~$103,842).
The attacker hinged on a weak spot in the SushiSwap protocol via a smart contract component known as Sushimaker. The platform created a new trading pool digg/eth with low liquidity. The absence of a bridge that should have sent a reward to stakers resulted in oversized fees to the hacker.
Sushimaker is an indispensable part of the decentralized exchange (DEX) automated market maker responsible for handling transaction fees. Transactions from all trading pairs are processed, and a reward is distributed among liquidity providers in the native token sushi.
The hack, which has been described by many as a rug pull, was simply a exploitation of a weak link on the SushiSwap protocol. This was explained in a report from a crypto-journalist pseudonymously known as rekt.
He explained that he reached out to the SushiSwap team about the hack. Contrary to what many described, he claimed it was not a rug pull:
“After researching further, we found that although there had been an exploit, the damage had already been contained, and what had been perceived as a threat to the entire SushiSwap protocol was simply a smart scavenger picking up food that had been left behind.”
No Market Backlash
SUSHI’s price appears not to have been affected by the news. The token climbed above the $8 level on the day. Before the hack, prices briefly fell below $7. However, bulls quickly regained control, increasing their bids at the time of writing.
However, the same cannot be said of the digg/eth pair as prices have plummeted over the last three days. Meanwhile, digg/usd prices fell dramatically from about $92,000 to $41,000 at press time.