DeFi Protocol Osmosis Has Been Halted Following A $5 Million Theft.

The Osmosis (OSMO) chain has been halted because a “critical bug” may have resulted in the loss of $5 million from the liquidity pools of the decentralized finance (DeFi) protocol.

The chain was halted early on June 8 by Osmosis core developers and network validators.

The issue was discovered by a Reddit user who warned that when funds were entered into a liquidity pool and then immediately withdrew, the withdrawal was boosted by 50%.

The moderator of the forum has now removed that post. But not before users exploited the glitch and stole millions of dollars in cryptocurrencies.

“Liquidity pools were NOT ‘completely drained,’ according to Osmosis.” Devs are fixing the bug, scoping the size of the losses (likely in the range of ~$5M), and working on recovery.”

The team later confirmed that “the bug has been identified and a patch has been written.” More testing is being conducted before validators are advised to coordinate a restart.” The Osmosis DEX and its native wallet remained unusable while the chain was stopped.

Osmosis is a cross-chain transaction-capable automated market maker (AMM) built on the Cosmos blockchain. According to DefiLlama, it maintains a decentralized exchange (DEX) with approximately $212 million in total value locked (TVL) at the moment the chain was halted.

The attack follows a recent software upgrade to the Osmosis network designed to increase efficiency and user experience. Following the change, some validators apparently began to raise concerns on Discord, including “always missing some blocks.

OSMO’s price was down 4.3% in 24 hours as of press time, at $1.08. According to Coincu statistics, the coin has dropped 90% from its all-time high of $11.25 on March 4.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Patrick

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