DeFi protocol “Gamma Strategies” leaked virtual currency worth 490 million yen

Examples of virtual currency leaks

Gamma Strategies (hereinafter referred to as Gamma), a DeFi (decentralized finance) liquidity management protocol, announced on the 4th that it had suffered from an asset outflow.

After becoming aware of the issue, we began an investigation and are currently taking steps to suspend deposits while still allowing withdrawals. Blockchain security companies PeckShield and BlockSec told The Block that assets worth 490 million yen ($3.4 million) are believed to have been leaked.

The Gamma project first announced that it was responding to a security incident at 1:59 pm on the 4th, Japan time. After that, they also reported that they were receiving help from partners and experts. Since deposits are necessary for asset outflows, measures to stop deposits are effective in preventing further outflows.

At 9:17 p.m. on the 4th, he explained, “Through preliminary investigation, we have come to the conclusion that the root cause of the unauthorized leak is the Vault.” Vault is a foundational feature of Gamma and is a smart contract created to provide liquidity to liquidity pools.

Gamma’s team explained that the problem was that Liquid Staking Token (LST) and stablecoin Vault had a wide price range of 50-200% for concentrated liquidity. “This wide range of settings allowed an attacker to issue an excessively large number of liquidity (LP) tokens.”

Please note that Gamma has a fake account that has been verified by X (formerly Twitter), so be careful.

connection: What is DeFi (decentralized finance)? A thorough explanation of the advantages, disadvantages, and important points that even beginners can understand

Future actions

Regarding future measures, the company explained that it will publish a detailed analysis of the issue in the next few days. In addition, the following will be done:

• Bring your price range to a safe level
• Get your code reviewed before resuming deposits
• Maximize compensation for affected users

According to the official website, Gamma supports five blockchains including Ethereum (ETH) and Arbitrum (ARB) as of March 2023. It can be used with applications such as Uniswap and QuickSwap.

Gamma’s team asked the attackers to return their assets via Explorer’s Etherscan and Arbiscan. The company also said it would offer a reward for finding the problem.

connection: Metamask and others warn that virtual currency may be illegally leaked from a wide range of Ledger-compatible dApps

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