Cosmos’ Osmosis Halted After a $5M Exploit

Users exploited the bug where they could add liquidity to a pool & the value of the liquidity withdrawal was 50% higher than the deposit.

The automated market maker (AMM) built on Cosmos, Osmosis, was halted because of an exploit that may have led to about $5 million being drained from liquidity pools.

An emergency bug in the liquidity pools of the Osmosis blockchain, which is used to create liquidity and trade IBC-enabled coins, has been reported.

It all started when Reddit user “Straight-Hat3855” claimed in a now-deleted post that there was a severe vulnerability where anyone could add liquidity to any pool and the value of the liquidity withdrawal was 50% higher than the deposit.

While no one believed it, the Osmosis team verified that the issue let malicious users withdraw $5 million from liquidity pools.

Exploitation of the Osmosis bug by users

As soon as the validators found the problem, they were able to respond within 12 minutes.

The network validators halted the chain at block #4713064 as a result of this. The chain was halted for emergency maintenance, according to a Discord post by Osmosis community analyst RoboMcGobo.

Osmosis analyst RoboMcGobo informs on the Discord

During press time, the DEX tweeted ‌the bug has been detected, a patch has been written, and chain updates will be tested soon.

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