bZx’s Third Exploit of 2020 Ends With $8 Million Lost

Key Takeaways

  • bZx marked it’s third exploit of 2020, losing $8.1 million of funds to a vulnerability in the code.
  • The BZRX token fell by 30% in the aftermath of the incident, as the burden of the loss was shifted to the insurance fund.
  • bZx’s fate rests with the broader DeFi community and whether they decide to return to the protocol as users.

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Less than two weeks after re-deploying on mainnet, bZx has been exploited for $8.1 million of LINK, ETH, and stablecoins. The incident caused the BZRX token to fall over 30%, as the value of the token secures protocol deficits.

How Many Times Is Too Many?

Earlier this year, the team behind bZx paused the protocol after two consecutive hacks caused a mass outflow of capital. Promising to come back stronger, bZx built a new iteration of the product over six months. The protocol was finally deployed again on Sept. 2.

It’s been less than two weeks, and bZx has been attacked once again.

This time, however, the loss is exceptionally higher than before. Given prevailing prices at the time of the hacks, bZx had been previously exploited for $330,000 and $640,000, respectively.

The latest hack saw $8.1 million of customer funds lost.

SIMETRI gains of 1031%

bZx’s iToken’s were deployed with a bug that allowed users to increase their balances artificially. The platform’s sustained losses were as follows:

  • 219,199.66 LINK ($2.61 million)
  • 4,502.70 ETH ($1.65 million)
  • 1,756,351.27 USDT
  • 1,412,048.48 USDC
  • 667,988.62 DAI

The insurance fund will bear the liability for these losses. Since the BZRX token derives a portion of its value from the insurance fund, its price tanked 31%…

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