Jimbos Protocol, an Arbitrum-based decentralized platform that hosts liquidity provision and token swaps, has just been hacked for approximately $7.5 million. The native token for the protocol has also plunged in value.
Jimbos Part Ways With $7.5M
The blockchain security firm PeckShield initially discovered the exploit, which notified the decentralized finance (DeFi) project.
The bad actor took a flashloan of 10,000 WETH (approximately $18.2 million) to conduct the attack. On-chain data reveals that the hacker capitalized on a vulnerability in the protocol’s slippage control mechanism. This allowed the bad player to exploit an imbalance in the liquidity pool’s price range of crypto assets.
In the process, the hacker inflated the price of the protocol’s native token, JIMBO. Following the exploit, JIMBO’s price dropped by over 20%. Currently, the token trades at only fractions of a cent.
After the security breach, the bad market player was able to steal 4090 ETH (approximately $7.5 million) and move them from the Arbitrum network to the Ethereum network. The funds remained in the custody of the hacker at the time of writing.
Meanwhile, Jimbos Protocol acknowledged the attack and stated its funds’ recovery plan:
“We are aware of the exploit regarding our protocol and are actively in contact with law enforcement and security professionals. We will release further information when possible.”
DeFi Hacks on the Rise
The latest attack has further stressed the need for strong security for DeFi projects. As hackers continue to exploit vulnerabilities in smart contract-enabled protocols and steal funds from crypto projects, concerns have been raised among crypto users.
Earlier this month, the decentralized exchange (DEX) Level Finance was hacked for $1 million through an exploit of its Referral Controller Contract. In another report, the BNB Chain-based DEX SafeMoon parted ways with about $9 million.
These and other examples of DeFi security attacks stress the need for projects to build robust security for their protocols.
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