Osmosis DEX Halted After $5M Exploit

Osmosis is a popular decentralized exchange (DEX) based on the Cosmos ecosystem, it was halted by its developers today after an exploit.

Osmosis was halted at block #4713064 after a bug was exploited within their liquidity pool, leading to a confirmed loss of around $5M.

A liquidity pool is a pool of tokens locked within a smart contract that allows for liquidity on a DEX, to facilitate trades.

This bug was noted in a now-deleted Reddit post that stated “Go put $5 in pool #1. Add liquidity, then remove liquidity. Now you have $15.” Users were seen to have been exploiting this prior to the halt.

The Osmosis team confirmed the bug has been identified and that a patch has been written. A bug report and action plan are coming, after which validators will be coordinated for a restart.

Update: The bug has been identified and a patch written.

More testing is underway before validators are recommended to coordinate a restart.

Full bug report and action plan for more thorough and proper end to end testing of chain upgrades to follow in coming days. https://t.co/DjJMOEQxrT
— Osmosis ? (@osmosiszone) June 8, 2022

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