cryptoknowmics.com
Following a $2 million exploit, prospective customers of an Arbitrum-based decentralized finance (DeFi) project are now out of pocket. On February 21, the incident was reported by Web3 security company CertiK in response to a tweet from the Hope Finance account warning customers of the fraud.
Hope Finance Fraud Carried Out Shortly After The Project Launch
It is challenging to find specifics on the project. The platform announced its plans for an algorithmic stablecoin dubbed Hope token (HOPE), which dynamically regulates its supply in relation to the price of Ether, on Twitter in January 2023. Entries on the account claim that shortly after the platform became live on February 20, a Nigerian national allegedly carried out the scam and transferred more than $1.86 million to Tornado Cash.
Smart Contract Audited By Cognitos
A Cognitos representative audited the Hope Finance smart contract, according to a tweet from February 13th. The audit summary identified two significant contract function weaknesses. This includes an improper modifier and reentrancy assaults as potential threats. Cognitos discovered that the smart contract code had passed the audit successfully despite indicating these vulnerabilities. Following the scam, Hope Finance informed users of a tool that would allow them to immediately withdraw staked liquidity from the system. The layer 2 roll-up network called Arbitrum on Ethereum allows for an exponential scaling of smart contracts. The two layer-2 protocols continue to handle an expanding number of transactions within the Ethereum ecosystem alongside Optimist.