The malware has the potential to drain all of the monies from the pools, although the recorded loss is about $5 million. Osmosis, on the other hand, was able to avert the disaster.
Osmosis Network, a Cosmos-based DeFi protocol, was terminated on June 8th at block #4713064 after a significant vulnerability in its liquidity pools was discovered. The exploit occurred only two blocks before the pause.
A Reddit user originally revealed the assault, warning that if a consumer adds funds to an Osmosis pool, they will get an additional 50% upon retrieving it. The post was later removed.
However, users quickly began exploiting the vulnerability to steal payments from Osmosis.
In one occasion, a fraudulent entity delivered 101,230 OSMO and profited 50% after abandoning the position a few seconds later with 151,084 OSMO tokens. They were able to repeat this procedure at least 30 times.
Only after validators began reporting concerns on Discord as a result of the v9 Nitrogen upgrade was an emergency halt implemented to save the remaining liquidity on the decentralized exchange. As a result, the Osmosis DEX and its native wallet are currently inactive.
The DeFi protocol reported detecting the flaw and producing a patch without providing further data on the actual nature of the vulnerability.
The developers are actively verifying the protocols before recommending that the network be restarted.
Later, the protocol's creators gave further information about what happened. More so, the firm admitted that $5 million had been overdrawn and offering to restore all lost assets.