Osmosis, a well-known DEX in the Cosmos ecosystem, had to immediately suspend services following a hack which resulted in a $5 million loss.
The osmosis chain has been suspended due to “emergency maintenance,” according to the DEX’s official discord, and users are advised not to use the chain or the DEX for any crypto activity for the time being.
The Osmosis blockchain’s liquidity pools, which are intended to establish liquidity and trade IBC-enabled currencies, have an emergency issue.
It all started when Reddit user “Straight-Hat3855” claimed in an already-deleted post that there was a big vulnerability in which anyone could contribute liquidity to any pool and the withdrawal amount was 50 percent larger than the deposit.
The Osmosis team stated that the issue allowed malicious users to withdraw $5 million from liquidity pools, despite the fact that no one believed it. Users had already began to use the weakness to drain funds out of Osmosis before the platform’s validators shut it down, according to on-chain operations.
The Osmosis DEX and its native wallet are presently unavailable due to the unavoidable chain halt. The team is working on providing a fix before the operators may resume the network.
Within 12 minutes of detecting the problem, the validators were able to reply. As a result, the chain was halted at block #4713064 by the network custodians. Developers suspended the chain for emergency maintenance, according to Osmosis community analyst RoboMcGobo’s Discord post.
The current attack comes after Osmosis’ platform received a recent software update to improve performance and user experience. Following the upgrade, some validators reported issues such as “always missing some blocks.”
On Twitter, the Halt Prevented Total Liquidity Drain Osmosis shared an update:
“The liquid pools had not been “totally emptied.” Devs are correcting the bug, estimating the extent of the losses (likely in the $5 million area), and working on recovery. More information will be forthcoming.”
The chain had a decentralized exchange (DEX) with a daily trade volume of $11.8 million before it was shut down. According to trading on MEXC, the Osmosis token (OSMO) has dropped 6.96 percent in the previous 24 hours.
As of reporting time, the price of OSMO had declined by 4.3 percent in the previous 24 hours, to $1.08. The coin has plunged over 90% from its all-time high of $11.25 on March 4, according to CoinGecko data.
