El Dorado Founder: Bomb Contract Deployment Is To Protect ELP-1 Users

Key Points:

• The founder of El Dorado Exchange stated in response to yesterday’s incident, saying that the project is responding to the ELP-3 exploit incident that occurred last week.
• The purpose of this action is to protect ELP-1 users from potential attackers.
• He stated that their poor decision-making led to yesterday’s new attack.

After yesterday’s noisy incident, the head of El Dorado Exchange finally responded to answer questions from the community.

In reaction to yesterday’s occurrence, Dorado, the creator of Perpetual DEX El Dorado Exchange (EDE), published a statement claiming that the project is reacting to the ELP-3 exploit, a situation that happened last week (and paid a fee of $90,000).

Around this time, the project swiftly launched a contract dubbed the “bomb contract” to quickly liquidate whitelisted traders who targeted the platform in order to prevent bad traders who had previously assaulted the platform from starting another attack.

This fostered paranoia among the team members to keep an eye out for someone exploiting or trying to see whether an exploit was conceivable, which resulted in a self-fulfilling prophecy.

The only purpose of this contract is to catch a particular whitelisted address that it believes is assaulting ELP-1. This contract’s objective is to protect ELP-1 users from prospective attackers and to penalize them.

Dorado indicated that yesterday’s latest assault was the result of bad decision-making and that they will devise a mechanism to recompense the affected consumers. Dorado said that an attacker should not be compelled to do anything, regardless of their moral opinion. Dorado further stated that yesterday’s assailant demanded a processing fee of 10% of the stolen monies while returning the funds.

As Coincu reported, El Dorado Exchange suffered a $580,000 loss as a result of the assault. An address has been transferring modest sums of money to Arbitrum’s ELP-1 pool. And then promptly remove significant quantities of money.

According to the attacker, the protocol backdoor enables the developer to forcibly liquidate any position. If the developer confesses to pricing manipulation, the fund will be reimbursed. The attacker had returned 334,000 USDC, according to PeckShieldAlert.

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Harold

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