BNB Chain Suffers from NGP Protocol Exploit, $2M Stolen and Price Plummets as Funds Pass Through Tornado Cash Privacy Service
The DeFi (Decentralised Finance) ecosystem on the BNB Chain suffered a significant setback as the NGP protocol was exploited, resulting in a drain of approximately $2M. The attack targeted the price calculation mechanism of the protocol, leading to a sharp drop in the token price and panic selling among holders.
The exploit is believed to have centred on the contract's function, which used reserves from a single liquidity pool to determine the token price. The attacker bypassed buy limit checks by manipulating Uniswap V2 pool reserves in a single transaction.
The funds stolen were converted to ETH and bridged from BNB Chain to Ethereum. Subsequently, they were routed through Tornado Cash, an Ethereum-based privacy protocol, for obfuscation. The final transfers of the stolen funds were traced to Tornado Cash, leaving the protocol open to manipulation.
Security firms Blockaid and PeckShield have publicly commented on the NGP protocol exploit, highlighting the price oracle manipulation and recommending DeFi teams not to rely solely on a single DEX liquidity pool for price data to prevent similar vulnerabilities. Blockaid is also monitoring the attacker's wallets in real time.
Developers may face pressure to upgrade price feeds before liquidity returns, but as of now, there has been no announcement regarding a recovery or patch timeline. Security experts are calling for multi-source oracle solutions to prevent similar exploits in the future.
Blockaid urges users to avoid interacting with suspicious contracts until a fix is deployed. The drain was caused by a combination of price oracle manipulation and a flash loan attack, underscoring the need for robust security measures in the DeFi space.
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