coinfomania.com
The concept of decentralized finance (DeFi) may be the biggest buzzword in the crypto industry at the moment. At the same time, the emerging space has exposed the industry to severe losses within the last couple of months and doesn’t seem to have found a way around the problem.
On June 28, an unknown person exploited DeFi protocol Balancer Labs, to get around $500,000 richer, draining tokens worth that amount from the lending pools for Statera (STA) and STONK (STONK). Similar to a Fulcrum flashloan exploit, the latest theft was executed in a single, smart contract that resulted in a liquidity crisis for Balancer Lab’s STA and STONK pool.
Your @BalancerLabs pool is only as strong as its weakest token.https://t.co/y4HknNTfPU pic.twitter.com/DYwOd7YxWH
— 0xcat.eth (@CryptoCatVC) June 28, 2020
.@StateraProject announcement 👇 pic.twitter.com/Q3boYgBClO
— defiprime (@defiprime) June 28, 2020
Per the findings, the attack only affects the liquidity pool for deflationary tokens, a term that describes cryptocurrencies whose total supply usually decreases are more people use it. But while Statera claims that the theft only affects STA tokens held in Balancer’s pools, the token’s price has seen a significant decrease with the last 24 hours.
According to data from Coingecko, Statera (STA) is down 74.2% on the daily chart, trading at $0.00931038 at the time of writing this report. That price also means that the token is 93% of its all-time high of $0.1 recorded earlier this month.
Statera (STA) 24-hr Chart via Coingecko
Meanwhile, both Statera and Balancer Labs are reportedly working to resolve the latest exploit, although the latter at press time is yet to issue an official statement regarding the incident.
Balancer Labs, on its part, was also on the news in the past week for both the right and wrong reasons.
First, the DeFi protocol launched its governance token, Balancer (BAL), with the coin gaining more than 235% in under 15 hours. Controversially, though, the community voted on a significant protocol upgrade via a Discord pool, instead of leveraging the voting power conferred by the so-called governance tokens.