DeFi Powerhouse Beanstalk Farms Has Been Hit By A $180 Million Hack
Beanstalk Farms, a DeFi protocol that is credit-based, has been struck by hackers. The up-and-coming star of the DeFi space was exploited for more than $180 million. The hackers took advantage of Beanstalk’s vote governance system to perform the attack. The digital miscreant behind the attack triggered a flash loan secured by way of Aave, a decentralized protocol, to obtain the voting rights necessary to steal the funds. The theft occurred in mere seconds.
Why The Beanstalk Farms Hack Matters
Though hundreds of hacks occur on a daily basis, the Beanstalk Farms hack is especially important as it is one of the most revered DeFi industry projects. Beanstalk ameliorates cryptocurrency supply and demand challenges spanning a litany of digital currencies. The company’s development specialist, Publius, generated a governing system where participants cast votes on code to make their voices heard. Participants’ voting rights are determined by the number of tokens they own.
The DeFi product referred to as a flash loan facilitated the digital attack, transmitting money in the form of a loan to users for a brief period of time. Once the loan is obtained, the attacker exchanges the money for “Beans” to obtain a significant stake. The hacker then used the resulting code to transfer the money to his or her digital wallet.
The creative attack is concerning as it succeeded with such ease. The fact that nearly $200 million was transferred away from Beanstalk in mere seconds is concerning, especially in the context of cryptocurrency investing. However, it must be noted that the crypto and DeFi industries are still in their infancy, meaning there will inevitably be security hiccups as protocols and processes take shape.
How Did Beanstalk Respond To The Hack?
Beanstalk responded to the digital attack by offering the digital miscreant in question a 10% bounty if he or she promised to return 90% of the stolen money to Beanstalk’s digital wallet. The bounty offered to the hacker is a Whitehat bounty.
Furthermore, it is also worth noting that the founders of Beanstalk have admitted that the digital security flaw within its system were insufficient, meaning the hacker’s ingenuity isn’t completely responsible for the success of the attack. The company’s founders also delved into how the company would segue to the next stage of its evolution in the event that the hacker did not return the pilfered money.
The Next Step In Returning Business To Normal
If the hacker responsible for the $184 million theft of Beanstalk funds refuses to cooperate, the company will likely elect to reboot and engage in fundraising. However, there is some question as to how much money Beanstalk will be able to raise after this embarrassing hack and theft.
It is clear that Beanstalk and the DeFi industry as a whole are vulnerable to digital attacks. The saving grace of the industry is that those familiar with DeFi’s power players are confident about their digital security measures and overarching ability to survive across the long haul. In short, the Beanstalk hack should be viewed as merely a temporary setback that won’t mean much in the grand scheme of the DeFi industry’s progression.
