Merlin Labs - REKT

Security looser than a wizard's sleeve.

The PancakeBunny attack pulled the rabbit out of the hat, now a surprisingly similar string of attacks emerges from Binance Smart Chain.

$680,000 taken from Merlin Lab.

We have to set ourselves some standards here at - generally we won’t report on hacks concerning less than $1M, but when there’s something worth saying we’ll say it.

The same technique has been used three times in one week.

BSC developers must try harder.

Credit: watchpug

On May 26, 2021, 03:59:05 AM +UTC, less than 48 hrs after the Autoshark hack. Merlin Lab, (another fork of PancakeBunny), was attacked in a similar fashion to the Bunny and the Autoshark hack.

As a result, the hacker was able to remove ~240 ETH (~680K USD).

Transaction Details on BscScan.

1: Add a small sum of deposit to the LINK-BNB Vault (with this transaction).

2: Send 180 CAKE to the LINK-BNB Vault contract. (This is the key that leads to the hack.)

3: Call getReward with the deposit of LINK-BNB Vault from the first step.

4: With the large amount of CAKE token in the wallet balance of the vault contract (sent by the hacker in step 2), it returns a large amount of profit. As a result, the system minted 100 MERL as a reward to the hacker.

5: Repeat 36 times. Receive 49K of MERL token in total.

6: Swapped MERLIN token into 240 ETH and transferred out of BSC using Anyswap.

The hacker used the wallet balance of CAKE as the profit (performanceFee) which can be easily tampered with by just sending the CAKE token to the vault contract.

We don’t document these attacks to help the hackers, although sometimes they might thank us for our work.

Each attack provides a lesson for the protocols that remain.

If these lessons are ignored, meaning users' funds are lost, then what does that say about the founders and the auditors?

Merlin Labs was audited by Hacken on May 15th, just 11 days before this exploit.

Now they both take a spot at the bottom of our leaderboard.

Must try harder.

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