Recently, Uniswap, the decentralized exchange (DEX) platform had a huge security breach resulting in a total of $25.2 million worth of assets stolen from eight separate Uniswap pools. A tweet from Lookonchain sheds light on the event, claiming that the assets have been stolen using the method of “Sandwich attacking”. At the point of attack an original sum worth $13.4 million in WETH (Wrapped Ethereum), $3 million in USDC (USD Coin), $1.8 million in USDT (Tether) and 1.7 million in DAI (Dai) had been taken.

The malicious attack was funded by KuCoin, the cryptocurrency exchange, which sent the assets to be stolen to a total of eight different addresses. “Sandwich attack” involves two transactions in the same blockchain block. The idea is to freeze the asset's value and then submit the second transaction at the cheaper rate, allowing the attackers to benefit from the spread. It is not clear which techniques the attackers used, yet there is speculation of the use of flash loans during the assault, which are temporary and unrequested loans that have to be repaid during the same transaction in which the loan is taken out.

This attack that has taken place delivers an important reminder of how not a single platform is completely secure, as despite all its attractiveness, decentralized exchanges may lack the thoroughness when it comes to security measures. Until the investigations are over, we advise all Uniswap customers to be extra cautious submitting unusual activities in their accounts. Meanwhile KuCoin has yet to provide a statement of the unfortunate events, and identify and punish the perpetrators.



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