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Abracadabra.Money Hit by $13 Million Exploit Amid GMX Integration Breach

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  • $13 million in Ethereum stolen from Abracadabra.Money’s GMX-integrated pools.
  • GMX’s core contracts remain secure, limiting the exploit to Abracadabra’s cauldrons.
  • Stolen funds moved from Arbitrum to Ethereum, dispersed across three addresses.

A massive security failure resulted in digital thieves obtaining approximately $13 million from decentralized finance operations. On March 25 PeckShield reported that attackers had struck Abracadabra.Money smart contracts alongside their GMX V2 integration during a network breach. The thieves transferred money through Arbitrum while moving the stolen 6,260 Ethereum (ETH) from the network to Ethereum via a blockchain bridge.

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Source; Peckshield

The Impact on GMX and Abracadabra

Abracadabra.Money is a DeFi platform specializing in lending and borrowing and was the prominent protocol in the hack. Its protocol was hacked in Abracadabra’s “cauldrons,” smart contracts designed to facilitate DeFi activities including lending and liquidity provision. These cauldrons rely on GMX’s V2 liquidity pools, which were used in this instance, compromising the integration.

GMX’s core contracts initially experienced challenges yet GMX clarified this situation through one of its representatives. GMX communications contributor Jonezee assured the community about the safety of GMX contracts. Jonezee clarified that the breach affected only Abracadabra’s GMX V2 pools and did not impact the GMX platform. The released statement intended to reassure users regarding GMX’s general security framework.

Exploit Methodology and Stolen Funds Movement

Crypto forensics firm AMLBot provided insight into the mechanics of the hack. According to their investigation, the hacker funded an address using the Tornado Cash cryptocurrency mixer before the attack. The stolen Ethereum was then moved through the Arbitrum network and bridged to Ethereum. The stolen funds were subsequently distributed across three separate addresses.

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Source: AMLBot

The breach at Abracadabra.Money only affected their smart contracts, but general concerns exist about security within integrated DeFi protocols. Abracadabra.Money experienced a security breach shortly after losing $6.49 million through a similar incident while its Magic Internet Money (MIM) stablecoin lost its peg to the US dollar.

After the breach the Abracadabra.Money team declared their commitment to investigating the incident. GMX users received confirmation that its contracts remained free from any issues. DeFi platforms are exposed to attack vulnerabilities mainly when working with multiple protocols. The investigation teams from GMX, alongside Abracadabra are dedicated to detecting the breach source while building prevention measures for future attacks.

GMX on the Rise: $90 Target – Will It Break the $59 Barrier Soon?

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GMX has emerged as a subject of keen interest for investors and analysts alike. Over the past week, GMX’s price has experienced notable fluctuations, leaving traders eagerly anticipating potential developments.

As of last week, the coin has marked a 6.32% change in the past seven days. The coin’s current price stands at $54.69, accompanied by a 24-hour trading volume of $79.21 million and a market capitalization of $511.21 million. However, the cryptocurrency has witnessed a 5.70% decline in the last 24 hours, adding an element of uncertainty to its recent performance.

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GMX 7-Day Chart | Source: CoinMarketcap

In a recent X post, Crypto analyst Ali Martinez highlighted that GMX is currently displaying notable signs of a potential breakout from a head-and-shoulders pattern in its price chart. The emergence of a consistent 3-day candlestick close above the $59 mark appears to be a critical juncture. This development could serve as a trigger for an upward momentum, setting the stage for a bullish rally.

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If this pattern continues, there is growing anticipation that the coin could experience a substantial surge, aiming for an ambitious target of $90. Investors and market participants are closely monitoring these technical indicators, and a successful breach above $59 could mark the beginning of a significant positive trend for the stock.

GMX Price Prediction

Changelly, a prominent name in the crypto forecasting arena, has offered a short-term forecast, anticipating a 10.18% increase in GMX’s value. According to Changelly’s prediction, GMX could reach $61.67 by January 14.

Technical indicators from Changelly also contribute to the positive sentiment surrounding the coin, with a Bullish 93% market sentiment. Meanwhile, the Fear & Greed Index stands at 71, indicating a prevailing sense of greed among investors.

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GMX on the Rise: $90 Target - Will It Break the $59 Barrier Soon? 6

Experts look back at GMX’s price fluctuations at the beginning of 2023. Based on these historical patterns, crypto analysts predict an average GMX rate of $59.56 in January 2024. The projected range suggests a minimum price of $54.66 and a maximum of $64.45.

As the coin continues to capture the attention of the crypto community, investors remain vigilant, eager to see whether the anticipated bullish momentum will materialize or if further market volatility lies ahead. 

Related Reading |  BlackRock CEO Praises Bitcoin As A Hedge Against Government Tyranny

GMX: XRP, SOL, DOGE Yields Spike To 75%

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Popular decentralized exchange GMX recorded a spike in annualized yields on popular major tokens, reaching staggering heights of up to 75%. This remarkable increase in yields came into effect following the activation of Arbitrum incentives on the platform earlier this week. The platform, renowned for enabling users to trade spot and perpetual futures for major tokens through an on-chain interface at minimal fees, has therefore gained substantial traction. In the past 24 hours alone, GMX facilitated trades amounting to over $136 million, according to data.

Among the most notable yield percentages, XRP trading pools on GMX are currently rewarding users with nearly 75% returns when paired against the U.S. dollar. Similarly, Solana’s SOL and Dogecoin [DOGE] pools are displaying impressive yields, reaching up to 65%. Bitcoin [BTC] yields have surged to over 28%, marking the highest yield among decentralized finance [DeFi] platforms. Ether [ETH] yields in the exchange have also experienced a significant spike, reaching 19%, as per platform data.

These lucrative yields are made possible through liquidity provided by individual GMX Market [GM] pools. Liquidity providers, individuals who lock their tokens on GMX, are rewarded with a share of fees earned from services such as leverage trading, borrowing, and swaps.

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GMX: XRP, SOL, DOGE Yields Spike To 75% 8

The platform’s ability to offer such enticing rewards can be attributed to its position as the largest recipient of Arbitrum’s ARB token grant. This grant was allocated following a community vote in October and was part of a short-term incentives program [STIP] round. Projects built on the Arbitrum blockchain collectively received $40 million in ARB tokens to attract new investments to the platform.

GMX’s Distribution Plan Of 12M ARB Tokens

Over the course of 12 weeks, GMX plans to distribute 12 million ARB tokens across three distinct incentive categories. The initiative begins with incentives for users providing liquidity to trading pools. Subsequently, trading incentives will be introduced in the upcoming weeks, rewarding users who engage in high-volume trading across various tokens on the platform. Finally, grant incentives will be offered, encouraging developers to create innovative products for the enhancement of GMX.

This surge in annualized yields and the platform’s proactive approach to incentives marks an exciting phase for GMX, indicating substantial opportunities for traders and investors in the decentralized trading space.

GMX DEX loses $565K in a recent exploit

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GMX, a decentralized exchange, fell victim to a recent exploit. According to reports, a price manipulation attack on the decentralized exchange (DEX) GMX allowed an exploiter to steal $565,000 from the Avalanche (AVAX)/USD market.

The attack, which affected GLP token holders who contributed liquidity to GMX in the form of AVAX (the Avalanche token), is believed to have been carried out by an anonymous exploiter who profited from GMX’s “minimum spread” and “zero price effect” characteristics.

GMX confirmed the exploit on Sunday

In a Sunday post on Twitter, the DEX acknowledged the price manipulation exploit but said that despite setting a $2 million cap on long holdings and a $1 million cap on short positions, the AVAX/USD market will continue to be active.

https://twitter.com/GMX_IO/status/1571439325413511169

Joshua Lim, the head of derivatives at Genesis Trading, was one of the first to examine the exploit. He claimed that the perpetrator “successfully extracted profits from the DEX’s AVAX/USD market by starting large positions at 0 slippages” before transporting the AVAX/USD to centralized exchanges at a marginally higher price.

The first cycle of this exploit method, according to Lim, began at 1:15 AM UTC on Sunday and was repeated five times. Approximately $4 to $5 million worth of AVAX were moved during each cycle, and the exploiter profited by about $565,000 after paying spreads to market participants on other exchanges.

While GMX quickly limited short and long open interest for AVAX/USD to safeguard the DEX from further manipulation, Lim stated that GMX may have to do away with its “zero price effect” feature despite having signed up a lot of users thus far.

A trader with the correct approach might wipe out GLP token holders, according to Taureau, the founder of layer-2 DEX ZigZag, who expressed worry about the long-term viability of GMX’s exchange platform in a video chat on September 2.

In other events, a hacker was able to steal 200 WETH from the Ethereum PoW chain thanks to a replay attack on Omni bridge. Security company BlockSec discovered a replay attack on the Ethereum PoW chain on September 18.

Through the Omni bridge, the attacker sent 200 WETH from the Ethereum PoS chain. According to reports, the transaction was duplicated on the Ethereum PoW chain.