• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • About us
  • Write for us
  • Terms and Conditions
  • Privacy Policy
  • Disclaimer
  • Contact
  • All Posts
  • Advertise

TronWeekly

Crypto World News

  • Home
  • Education
    • Best TRON Wallets
    • Beginner’s guide to TRON
  • Opinion
    • Tron Tokens
    • Market Analysis
  • Industry
    • Tron Exchange
    • Project Review
  • Press Release
  • Advertise
  • About us
    • The Team
    • Editorial Policy
    • Write for us
    • Privacy Policy
    • Disclaimer
    • Terms and Conditions
    • Contact
You are here: Home / News / DeFi / DeFi protocol, Alchemix’s rug pull ends up benefitting users
DeFi protocol, Alchemix's rug pull ends up benefitting users

DeFi protocol, Alchemix’s rug pull ends up benefitting users

June 17, 2021 by Chayanika Deka

DeFi exploits and rug pulls are not new. And as the space saw unprecedented growth, it became a hotspot for malicious actors and hackers looking for vulnerabilities in a protocol. In May, Binance Smart Chain [BSC] was observed to be the epicenter of the chaos. This has been a huge headache for market participants in DeFi as clones and unaudited protocols continued to make their way masquerading as legitimate ones.

However, in a first of its kind, decentralized finance protocol [DeFi] rug pull ended up benefitting the uses. As miraculous as it sounds, a bug let off borrowers’ loans prematurely for some time. The contracts for one of decentralized finance protocol, Alchemix’s synthetic assets, alETH, had experienced an “incident” which essentially resulted in users getting free money. In short, the users were allowed to withdraw collateral they shouldn’t have been.

What exactly transpired in this apparent DeFi “rug pull”?

It all started when some users of the platform’s alETH vault realized no outstanding debt even after previously borrowing alETH at a 4:1 collateral ratio. Moreover, the debt ceiling of almost 2K ETH was also freed up which enabled the minting of new alETH again. Soon after the team observed this, the minting of new alETH was halted temporarily. According to the post-mortem report by the DeFi protocol, both Yearn and Alchemix dealt with the issue efficiently.

In addition, it took Alchemix 15 minutes to execute a halt the mint function for alETH.

Detailing on the root cause, Alchemix stated,

“An issue with the deployment script of the alETH vault accidentally created additional vaults, the Alchemist then used the wrong index in the array of vaults which caused the outstanding rewards to be calculated wrong, forcing the transmuter funds to be sent entirely to pay off user debts.”

The loss is restricted to the backing of alETH only. The incident resulted in no user funds being lost because individual users, as well as anyone else currently in the contract, were able to withdraw all of their crypto-assets. The incident also did not have any impact on Yearn whose vaults kept functioning appropriately.

Are existing funds at risk of this happening again? According to the DeFi protocol, existing funds are not at risk of this incident happening again. Alchemix plans to redeploy a new Transmuter that correctly positions a single vault at index 0 to guarantee that this incident does not transpire again. It further revealed that it will install a fresh Alchemix Vault which will steer clear of the “maligned state of the current contract.”

Filed Under: DeFi, News Tagged With: DeFi, rug pull

Primary Sidebar

Recent Posts

  • Cryptocurrency balance freeze of Vauld: Indian saga August 14, 2022
  • Vauld’s Legal Woes Mount After ED Freezes Assets Worth $46M August 12, 2022
  • XRP Rewards Programs Now In Japanese Shinsei Bank August 12, 2022
  • Trexpunks Boosts NFT Market Sentiment With New Features August 12, 2022
  • Pets vs Pets August 12, 2022

Footer

News

  • Altcoin News
  • Bitcoin News
  • Blockchain
  • Tron News
  • World

Digest

  • Meet the Founder
  • Price Winning Article
  • DeFi
  • Cyber Security
  • Crypto Scam

Industry

  • Project Review
  • Technology
  • Fintech
  • Tron Exchange
  • New in Town

Tron Universe

  • Event and Tron Parties
  • New in Town
  • Tron Tokens

Follow Us

Subscribe US

Copyright © 2022 · Tron Weekly. All Rights Reserved. NOTE: Tron Weekly is an independent crypto news site that adheres to the strict journalism policy anchored on transparency, trust, and objectivity, we have no affiliation with the TRON Foundation, its founder Justin Sun or any other cryptocurrency firm.