Saddle Finance - REKT 2

$11M was stolen from Saddle Finance yesterday, with a further $3.8M rescued by BlockSec.

This latest attack makes the Curve knock-off take their second position (#43) on our leaderboard, much higher than their debut in January of last year.

Despite claiming that “user funds are safe”, Saddle later clarified they were only referring to the amount that was not stolen. can clarify that the $11 million that was stolen, is definitely not safe.

Credit: SlowMist and PeckShield

The funds were taken from the protocol’s sUSDv2 metapool in which Synthetix’ sUSD is paired with saddleUSD-V2 LP tokens (from the DAI, USDC, USDT pool).

The exploit was possible due to a bug in an old version of the MetaSwapUtils library which doesn’t use a VirturalPrice to calculate the value of the LP token during metapool swaps.

The issue had been fixed in the current version, but the swap calculation was still using the old version.

The hacker made a series of flash loan assisted sUSD/saddleUSD-V2 swaps in the metapool, manipulating the price of the LP token which could then be swapped back for more sUSD.

Exploiter’s address, initially funded via Tornado Cash: 0x63341b…

Main hack tx for (3375 ETH): 0x2b023d…

Second hack tx (for 557 ETH): 0xe7e047…

BlockSec whitehat tx for (1357 ETH): 0x9549c0…

Though funds have begun to move through Tornado Cash, at the time of writing, the majority remains in the exploiter’s address.

In November of last year, Saddle published a report on the vulnerability after a $8.2M near-miss for Synapse protocol who were using some Saddle code.

BSC-based were also hit via the same attack vector.

The resulting fix to the MetaSwapUtils library was made in December but, apparently, the code wasn’t implemented into metapool swaps properly.

Saddle forking Curve: if it ain’t broke don’t fix it.

Saddle not implementing their own fix: if it ain't fixed don't use it.

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