👉 Over 50% of Top 100 Banks Have Exposure to Crypto

The world of decentralized finance is one that is filled with numerous benefits. Whether it be through the implementation of blockchain technologies to better our world or simply becoming rich beyond our wildest dreams via trading with cryptocurrencies, DeFi has something for everyone. However, it has also attracted a number of unsavory individuals who seem hell-bent on exploiting the thriving industry for their own personal gains at the expense of everyone else. This had led to increased regulation and scrutiny from governmental officials, which had also culminated in the recent infrastructure bill being discussed by Congress.

Just this year alone, there have been far too many hacks that have occurred, with a notable one being the infamous Colonial Pipeline incident which had caused shortages all over the East Coast. The 2019 hack on Binance, the world’s biggest cryptocurrency exchange, had resulted in over $40 million being stolen and 7,000 BTC had been lost back then.

Just when it looked like things could not get any worse, we have now witnessed the biggest hack in the DeFi sector thus far, with over $600 million being stolen from Poly Network, a cross-chain protocol.

 

It is difficult to imagine what life is like right now for Poly Network, as confidence in the DeFi protocol has been shaken to its core, and investors are unsure as to whether it would be a worthwhile investment to continue using Polygon’s services. Polygon’s native token, MATIC, had increased in price recently though, recording a spike of 25% as of the time of this writing. It is worth mentioning though that nearly all of the altcoins are currently experiencing similar increases as well.

Still, the fact that Poly Network was the victim of the largest hack in history cannot be understated. It is a wake-up call for all cryptocurrencies and projects in the DeFi space to enhance security measures immediately as there is an aura of unrest and paranoia penetrating the world of decentralized finance nowadays that must be addressed. The hacker, according to the official release, siphoned assets from Binance Smart Chain (BSC), Ethereum, as well as Polygon’s network. The team had tweeted out that it is with great regret that they must inform everyone that Poly Network was indeed hacked and that the crypto-assets were transferred to different wallet addresses.

Poly Network is a protocol developed by the inventor of the Chinese project known as 'Neo' that runs on Binance Smart Chain, Ethereum, and Polygon blockchains. Meanwhile, an investigation by each network determined that the hackers took about $273 million in Ethereum, $85 million in USDC from Polygon, and finally $253 million from BSC. A vast amount of tokens were thus taken, including USDT, BNB, ETHB, BTCB, BUSD, SHIB, UNI, FEI, DAI, and ETH.

 

Firstly, we need to briefly discuss the cause of the attack in order to hopefully prevent it from happening on such a massive scale again. According to Poly Network's tweet, the hacker(s) exploited a weakness within contract calls, however, the attack had not been triggered by a single keeper. Some had initially believed that this was an advanced version of the flash loan exploit technique which has crippled others in the DeFi community in the past.

Additionally, the combination of cash flow and fingerprint information revealed that this was in all likelihood a long-planned, coordinated, and premeditated attack, as per a statement made by Slowmist, a China-based blockchain security company. Others believe that the hack was not based on the exploitation of smart contracts, but rather that it was a simple matter of taking advantage of the seemingly reckless and rushed design decisions taken by Poly Network.

 

As per the latest developments, it is now known that the hacker(s) have indeed returned more than half the money that was stolen, however about $268 million is still currently unaccounted for.