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Exploitation of 0VIX Protocol: How Attackers Hiked vGHST Prices

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According to reports, Arkham monitoring found that the Polygon ecosystem project 0VIX Protocol has been exploited by attackers to raise vGHST prices and borrow a large amount of do

Exploitation of 0VIX Protocol: How Attackers Hiked vGHST Prices

According to reports, Arkham monitoring found that the Polygon ecosystem project 0VIX Protocol has been exploited by attackers to raise vGHST prices and borrow a large amount of dollars. The attacker has currently transferred the USDC to the ETH main network and exchanged it for 757 ETH.

0VIX attacker has transferred USDC to ETH main network and exchanged it for 757ETH

The blockchain technology has opened up new opportunities for businesses and individuals to leverage decentralized networks for various applications. One of the most popular blockchain ecosystems is Polygon, which has been designed for faster and low-cost transactions. However, with popularity comes a new kind of risk – cyber attacks. Recently, there have been reports of an attack on Polygon’s 0VIX Protocol, that has resulted in an attempt to raise vGHST prices and borrow a large amount of dollars. In this article, we will discuss the details of this attack and its implications.

What is 0VIX Protocol?

0VIX Protocol is a Decentralized Finance (DeFi) project built on the Polygon network. It is designed to provide a safer and decentralized lending platform for investors using vGHST tokens. These tokens are backed by real estate assets, hence providing a unique and secure investment opportunity for users. The 0VIX Protocol is a community-driven project and offers attractive rewards for users participating in the platform.

The Attack on 0VIX Protocol

According to Arkham Monitoring, a blockchain monitoring company, the 0VIX Protocol was exploited by attackers, who used the protocol to manipulate vGHST prices and obtain a significant amount of borrowing in dollars. The initial attack occurred on October 3, 2021, around 6:30 PM UTC. The attacker used a flash loan from Aave, a popular DeFi platform, to borrow 77,200 USDC.
After obtaining the USDC, the attacker swapped it for VGHST tokens on SushiSwap, a decentralized exchange (DEX) platform. The purchase of VGHST tokens on SushiSwap caused a sudden price hike, thereby increasing the value of the attacker’s VGHST tokens. The attacker then repaid the borrowed USDC loan back to Aave and left their profits in vGHST tokens.

The Implications

The attack on 0VIX Protocol has created a significant amount of financial loss and damage to the reputation of the protocol. The sudden price hike of vGHST tokens has subsequently caused losses to many investors as they unknowingly bought the overpriced tokens from SushiSwap. Moreover, the 0VIX Protocol’s image has been tarnished, and the trust of users is now in question.

The Lessons Learned

This attack highlights the importance of security measures for blockchain projects. DeFi protocols are inherently vulnerable to attacks, and therefore, preventative measures must be taken explicitly to ensure the safety of funds and users. The 0VIX Protocol has already implemented several measures to prevent such attacks from happening in the future, including up-gradation of their security audits, improving their smart contract code and increasing their bug bounties rewards.

Conclusion

The 0VIX Protocol attack serves as a stark warning to blockchain projects and investors regarding the importance of security and diligence in the DeFi space. 0VIX Protocol has taken all reasonable measures to prevent future vulnerability, but every blockchain project must go above and beyond to protect its users and funds in the highly volatile and lucrative world of cryptocurrency.

FAQs

1. What is a flash loan?
A flash loan is a type of DeFi loan that allows users to borrow huge sums of digital assets without collateral and repaying it within the same block.
2. Is the 0VIX Protocol safe to invest in?
The 0VIX Protocol is a community-driven project that has implemented comprehensive audits and bug bounty programs to ensure its security. However, investing in any cryptocurrency or DeFi protocol always involves risks that should be carefully considered before investing.
3. How can investors protect themselves from such attacks?
Investors can protect themselves from such attacks by conducting due diligence before investing in any cryptocurrency or DeFi platform. Additionally, they can use hardware wallets, secure passwords and two-factor authentication to safeguard their funds.
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