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.