Hackers deduced $3.2 million from the DeFi project Zabu Finance on the Avalanche blockchain – Bits Media

Zabu Finance decentralized finance project hacked through one of the liquidity pools. Hackers managed to deduce $3.2 million in various tokens. This was the first major hack of the DeFi project on the Avalanche blockchain..

A Twitter account under a pseudonym was the first to report the hack of the project. DeFiPrime. A little later, the information was confirmed by the official account of Zabu Finance:

“The Zabu team has not sold a single token from its reserves. We're in the process of breaking, it seems, that from the Spore pool. We are investigating the issue and need help.".

The development team later confirmed, that the vulnerability was in the Spore pool. The attackers used a protocol mechanism called “Transfer Tax” to issue tokens. The vulnerability allowed a significant amount of ZABU tokens to be issued as a reward for providing liquidity, what led to the collapse of the exchange rate. ZABU exchange rate collapsed from $0.004 to $0.00002 after the hack.

Shortly after the hack was discovered, the Zabu Finance development team issued a zero reward for providing liquidity. Now the team plans to distribute ZABU v2 tokens to users affected by the hack.

"Thus, People, lost money after being hacked, will receive tokens and will be able to continue supporting the protocol, if they want", - write the developers.

Previously Bitwise CFO Matt Hogan (Matt Hougan) stated, that the constant hacks of DeFi projects indicate that this industry is at a too early stage of development.