The post Levana Suffers Major Hack, Assures User Positions Remain Safe appeared on BitcoinEthereumNews.com.

The Levana perpetual swap protocol on the Osmosis blockchain underwent a severe exploit. Over 13 days, an unauthorized party drained more than $1.1 million from Levana’s liquidity pools. This incident, marking a significant setback for the protocol, resulted in losing 10% of its liquidity. Root Causes Identified Investigations into the incident revealed a multifaceted cause. Attackers exploited a congestion attack on the Osmosis blockchain, severely limiting user interactions with the market. This situation worsened due to a flaw in the Osmosis fee market code. During periods of high traffic, the gas prices set needed to be increased for transactions or bot maintenance.  Additionally, the exploit capitalized on “price staleness” in Levana’s integration with the Pyth oracle. This combination of factors enabled the attackers to manipulate market prices and drain the liquidity pools. Despite these challenges, Levana’s team emphasized that the Pyth oracle functioned as expected, pointing out that the vulnerability lay in their system integration rather than the oracle itself. Levana Immediate Measures and Future Plans Levana has taken prompt action to address the breach. They are developing a comprehensive solution scheduled for deployment in an upcoming update across all chains hosting Levana, including Osmosis, Sei, and Injective. This update aims to fortify the protocol against similar vulnerabilities in the future. In the interim, Levana has temporarily halted new position openings and modifications to current ones. They assure users that the exploit has not impacted trade positions and profits. The team focuses on safeguarding user assets and restoring full functionality as swiftly as possible. Compensation Strategy for Affected Parties In response to the financial losses incurred by liquidity providers, Levana is planning a twofold compensation approach. Affected parties will receive an airdrop and the distribution of collected protocol fees during the attack. This move demonstrates Levana’s commitment to its community…

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Filed under: News - @ December 29, 2023 2:10 am