The algorithmic stablecoin SafeDollar was attacked to zero, and the Polygon ecosystem also ushered in the hacker season?


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SafeDollar is not the first project in Polygon ecology to be publicly reported to have been hacked. Just a week ago, PolyDEX was attacked and lost about $500,000.

Original title: “SafeDollar is attacked to zero, Polygon ecosystem is about to usher in the hacker season? 》
Written by: longcrypto

On June 28, the Polygon ecological algorithm stablecoin project SafeDollar was attacked by an unknown hacker. The stablecoin SDO issued by the project dropped from a price of $1.07 to zero at around 12:25 this morning.

According to analysis, hackers took away USD 250,000 worth of USD and USDT from the attack.

Contract address:

Subsequently, the project party issued an announcement in the telegram group, requesting investors to stop all SDO-related transactions, and announced the incident report after investigating the compensation plan of the liquidity provider. As of press time, SafeDollar TVL is approximately US$25.7 million.

This incident is of iconic significance: First, the Polygon ecosystem was finally torn apart by hackers, and it is expected that subsequent “Polygon ecological projects suffered by hacker attacks” events may occur frequently. Second, once again pouring cold water on the dying algorithmic stablecoin, the future of stability is bleak.

Polygon ecology ushered in the hacker season?

In fact, SafeDollar is not the first publicly reported hacked project in Polygon ecology.

On June 20th, a hacking incident occurred in the Polygon ecological project PolyDEX. The hackers carried out a reentry attack on the Token Locker smart contract and stole approximately US$500,000 in funds from the project. Perhaps BSC has attracted too much attention from blockchain security companies, or the project is not well-known. In short, this hacking incident was not known to the public.

After the incident, PolyDEX took swift action to notify Polygon to prevent the hacker’s wallet from connecting to Ethereum. However, due to time zone differences, the request cannot be activated in time. At the same time, PolyDEX immediately deployed the patch. Due to the time lock, the patch did not have time to execute. In the end, the hacker transferred the funds from Polygon to Ethereum and escaped.

The algorithmic stablecoin SafeDollar was attacked to zero, and the Polygon ecosystem also ushered in the hacker season?

Detailed incident report:

SafeDollar was also implicated due to the previous IDO conducted on PolyDEX, resulting in the loss of 9,959 SDS SDS (“stocks” issued by SafeDollar).

In the end, the SafeDollar team decided to use the development fund to provide IDO buyers with lost SDS subsidies.

If the SafeDollar attack last time was a gun lying down. In the attack this time, hackers took the initiative to act on SafeDollar (the specific technique needs further analysis).

This is a dangerous signal.

We know that May is the darkest season for BSC. On May 2nd, BSC had its first lightning loan attack, which kicked off the BSC lightning loan attack since then. In May, there were as many as 12 hacked projects on BSC, causing nearly 200 million U.S. dollars in damage.

By June, the loss amounted to 22 million U.S. dollars.

Polygon ecology currently has a TVL of 5 billion US dollars. Although it is not as much as BSC, it is not a small number. Now that the pandora’s box of loopholes has been opened, who will be the next one to be targeted by hackers?

“Calculated stable” unstable

SafeDollar sees itself as a new generation of algorithmic stablecoins that integrate functions such as seigniorage, deflation, and synthetic assets.

  1. Seigniorage: When SDO exceeds $1, there is no tax. When SDO is less than 1 USD, seigniorage is charged.
  2. Deflation: Trading SDS will incur a 2% fee, half of which will be used to repurchase and destroy SDO, and the other half will be used to increase liquidity.
  3. Synthetic assets: SDO can synthesize safeUSDT (sUSDT) with USDT and safeMATIC (sMATIC) with WMATIC.

SafeDollar is a sentimental project.

To pay tribute to the previous generation of stable pioneers, SafeDollar airdropped nearly 100,000 SDOs to communities such as Basis Cash, Mithril Cash, bDollar, Iron.Finance, MidasDollar, etc. at the beginning of its launch.

On June 17, the ecological project IRON Finance on Polygon had a “run”, and the governance token TITAN returned to zero. SafeDollar announced on the same day that it would donate 50,000 SDOs (worth about 650,000 US dollars at the time) to TITAN holders, and announced that the system funds are safe and there is no fear of a run.

The SDO anchor is priced at US$1, up to US$19 (the day before IRON Finance was attacked).

Today, SDO has returned to zero, very thoroughly (1SDO=3*10^-12USDT). It will take only one month from the launch at the end of May to now.

Attachment: partly calculated stable price performance

The algorithmic stablecoin SafeDollar was attacked to zero, and the Polygon ecosystem also ushered in the hacker season? Image source: Twitter @billtheinvestor

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