Chaos on Binance Smart Chain
The Intelligent Insurer #19 – A series of successful exploits on Binance Smart Chain leave users incurring gigantic losses
Binance Smart Chain has been the target of several DeFi attacks recently. Several projects on the platform have been exploited raising widespread concerns for users of the chain. The nature and frequency of these events have led to various allegations, including the suspicion that the DeFi attacks may be deliberately organized and targeted.
Attacks on DeFi platforms have been a recurring event since the rapid growth in the ecosystem since 2020. Hackers have been exploiting the flaws in ‘developing’ projects to steal funds from those who have locked liquidity into these projects.
In the latest Intelligent Insurer, we highlight some of the recent attacks on the Binance Smart Chain. We consider the extent of these attacks and how much damage they are causing Binance DeFi users while also detailing the possible ways for users to guard against losing their investment in DeFi. Before providing such details, we will share an update on the development progress of Insured Finance.
Insured Finance MVP Launch Approaches
The MVP of the Insured Finance platform will launch on the Ethereum testnet this month. The testnet MVP will allow users to get a taste of the broad functionalities of the two-sided Insured Finance marketplace. Grounded in a sublime UI/UX, securing and providing insurance for digital assets has never been this easy. The below screenshot showcases an interface for purchasing insurance.
On the opposite side of the marketplace, users can easily fulfill insurance requests from those seeking specific coverage. The below interface highlights this functionality.
This is only a sneak peek at what will be possible in the Insured Finance MVP. A versatile suite of innovative and intuitive features will be at the disposal of early adopters.
Who is Behind the BSC Hacks?
The repeated exploitation of projects on the Binance Smart Chain (BSC) has attracted justified scrutiny. Within a couple of weeks, multiple projects have been attacked and severe losses have been incurred by the users of these projects.
On the 30th of May, it was reported that a hacker stole about $6.2 million worth of BUSD, the BSC USD-pegged stablecoin using a flash loan on Belt Finance. This is just one in a series of recent exploitations. Previously reported exploitations include $7.2 million stolen from BurgerSwap, $680K stolen from Merlin, and $100 million stolen from Venus. The Venus exploit, which happened on May 18th, was of particular interest to the protocol users, as many of them suspect that it was orchestrated by the protocol team behind the project.
During the Venus exploit, several users had their assets liquidated in an event that lasted over 3 hours. The event was characterized by unusual volatility that saw the price of XVS, the platform’s token, jump from $80 to $140 in a space of 3 hours, before embarking on a sharp decline.
A blockchain analysis uncovered one address that took some highly leveraged positions in Venus. The address was also used to speculate on the downside movements, making the event highly lucrative and widely believed to be an inside job.
The pattern and frequency of these attacks on BSC have become a concern for many. There is consensus among BSC users that the attacks are organized and connected. The community has called for the projects running on the chain to be more vigilant and apply necessary risk control measures.
Individuals Need to Take Responsibility for Their Assets
Asset security has become a serious concern for DeFi users. As demanded by the BSC community, project teams are expected to pay more attention to the security of assets on their platforms. However, the suspicion of an ‘inside job’ by the Venus team creates more concern for users under such circumstances.
Cryptocurrency users need to take more comprehensive measures to protect against unforeseen risks. Adopting digital asset insurance solutions is one such measure that can be taken. Insurance solutions like Insured Finance allow digital asset holders to secure tailored protection for their assets.
The DeFi ecosystem is still evolving, and many solutions are yet to achieve stability in terms of bug elimination and full platform security. Whether the attacks are coordinated by external attackers, or organized by insiders, securing digital asset insurance remains the most applicable means of asset protection for cryptocurrency users today.
About Insured Finance
Insured Finance is a decentralized, peer-to-peer insurance marketplace. Insured Finance users can request customized insurance on a wide variety of digital assets. Those that fulfill requests earn premiums and can earn a competitive return on their capital. Claims are fully collateralized and settled instantly.