The central theses
- An attacker attacked Bunny Finance with a flash loan in order to manipulate the price of BUNNY. After they sold the tokens, the price crashed 96%.
- The team is currently working on a reimbursement plan for the affected owners.
- Incidents on the Binance Smart Chain have multiplied over the past few weeks while users have raised concerns about the general state of the network.
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An attacker used a flash loan this morning to take advantage of Binance Smart Chain’s Bunny Finance earnings aggregator. They launched BUNNY tokens, which caused prices to drop by 96%.
Another exploit for Binance Smart Chain
A malicious actor targeted Bunny Finance’s BUNNY token with some sort of economic attack that included flash loans early Thursday. The attacker executed a flash loan to buy bulk quantities of BUNNY before selling it in the market. While none of the earnings aggregator’s vaults were affected, the price of BUNNY tokens fell 96%.
Flash loans are a type of innovation developed by Aave. They allow anyone to borrow an unlimited amount of funds without providing collateral, as long as they repay the amount in the same transaction. They have been the subject of debate because of the role they have played in many attacks. Flash credits initially gained momentum in DeFi, but recently started in the central “CeDeFi” network of Binance Smart Chain.
In this case, the attacker used PancakeSwap to borrow a large amount of BNB, which he then used to manipulate the price of BUNNY. They received a large amount of BUNNY because the pool’s balance changed when BNB was added. Then they sold the BUNNY to the market and paid back the BNB. It is estimated that the attack was worth around $ 200 million. A paper trace of your transactions can be displayed via BscScan.
The price of BUNNY first rose when the attacker added BNB to the pool and then suddenly fell when selling the tokens on PancakeSwap. The anonymous team behind Bunny has promised a reimbursement plan and withdrawals will be frozen while the team evaluates the damage.
Bunny Finance is one of the most popular projects for Binance Smart Chain, but this morning’s attack is another blow to Binance’s hopes of rivaling Ethereum. The platform has received widespread criticism recently after Meerkat Finance was used by its own developers and Uranium Finance funds worth over $ 50 million were stolen. More problems emerged just yesterday when Venus Finance users were hit by $ 200 million worth of liquidations.
Is Binance Smart Chain Safe?
Binance Smart Chain has offered a cheaper alternative to Ethereum for DeFi-related activities in the past few months. The low cost of using the network is part of what has attracted many high yield farmers to the network and has driven the price of the BNB to new highs. It is now the third largest cryptocurrency by market capitalization, after only Bitcoin and Ethereum.
However, with so many attacks and exploits on the Ethereum clone, there are reasons to be concerned about the health of the blockchain itself.
Several Binance Smart Chain users have reported that bridges between the network and other chains were closed following the Venus Finance attack, while others have suggested freezing the network for just $ 100,000 an hour. In a Twitter thread discussing recent issues, a user named CryptoUltron said the network was “constantly bifurcating out of control,” showing bifurcated blocks for each new block assigned to the chain.
I’m running a BSC node. The network forks constantly in an uncontrolled manner. For every block that is part of the main chain there are about 5 uncles (forked blocks). Multiple reviewers are using subpar hardware and are unable to keep up with the rest of the network.
– Crypto Ultron (@ProofOfBags) May 20, 2021
Binance Smart Chain uses larger blocks than the Ethereum mainnet, which means that the costs are spread across more transactions. This is not without its problems, however, as the larger block size options can create complications, as was extensively discussed during the Bitcoin block size wars. While the chain is still working, there are good reasons to be cautious about using Binance Smart Chain for the time being.
Disclaimer: The author owned BTC, ETH, and several other cryptocurrencies at the time of writing.
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