- The overall loss incurred by both the attacks totaled around $954,000.
- The first hack was due to bug exploitation in the bZx smart contract, while an oracle manipulation attack caused the second hack.
DeFi lending protocol bZx has been successfully hacked twice in just four days, incurring a total loss of about $954,000. According to bZx’s report, the first attack took place on February 14, when the team was attending the ETHDenver industry event. The protocol was compromised for the second time on February 18, as per The Block’s report.
During the first attack, the hacker used several DeFi protocols to lend and swap vast quantities of Ether and wrapped Bitcoin (WBTC) in a manner that allowed them to manipulate the prices and profit of the eventual leveraged trade. The attacker first loaned 10,000 Ether (ETH) from dYdX, a lending protocol, and later used 5,500 ETH ($1.46 million) to obtain a 112 WBTC loan (>$1 million) on Compound, another DeFi protocol. Following this, they used bZx’s Fulcrum trading platform to open a 5x leveraged position on the ETH/BTC pair with a 1,300 ETH investment. After that, they used Kyber’s Uniswap to borrow 5,637 ETH and swap them for 51 WBTC. Ultimately, by swapping the 112 WBTC from Compound to 6,671 ETH, the attacker was able to pocket a profit of 1,193 ETH (nearly $318,000). They then paid back the erstwhile borrowed 10,000 ETH to dYdX. The attacker was able to execute this elaborate attack by exploiting a bug in bZx’s smart contract. This bug has since been fixed.
Currently, the details about the second hack are still unclear. A message from Kyle Kistner, the project’s CVO, says that it was an oracle manipulation attack. Oracles are centralized components that provide on-chain applications with external data.
According to the estimates by The Block, the loss suffered totals 2,388 ETH (nearly $636,000). Kistner notes that the team can neutralize the hack and prevent the loss of user funds like they did for the first hack. He also said that the devs will now use ChainLink’s protocol to make the system safer.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks

XRP soars upon announcement that SEC will drop its appeal against Ripple
Ripple CEO Brad Garlinghouse announced that the SEC will drop its appeal against Ripple. The victory follows rumors of Ripple's lawyers negotiating more favorable terms than the company got in Judge Torres' ruling last August.

Dogecoin on-chain metrics signal a potential turning point once the crypto market stabilizes
Dogecoin price hovers around $0.168 on Wednesday after bouncing off its 200-week EMA last week. Santiment’s data shows that DOGE’s utility and whale wallets are rising, hinting at a potential rally for the dog-themed memecoin.

Bitcoin stabilizes below key resistance, risk-off sentiment persists
Bitcoin (BTC) trades around $83,300 at the time of writing on Wednesday after facing resistance around its 200-day Exponential Moving Average (EMA) at $85,500 since last week, with a break above this level suggesting a potential recovery.

Ripple's XRP futures signals increased bearish sentiment despite long-term holders seeing strong gains
XRP open interest and funding rates have remained largely negative in recent weeks. Investors remained calm despite the high bearish sentiment in the futures market, likely due to their large profits.

Bitcoin: BTC at risk of $75,000 reversal as Trump’s trade war overshadows US easing inflation
Bitcoin price remained constrained within a tight 8% channel between $76,000 and $84,472 this week. With conflicting market catalysts preventing prolonged directional swings, here are key factors that moved BTC prices this week, as well as key indicators to watch in the weeks ahead.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.