Binance Smart Chain DeFi hack increases as TVL and volumes soar

The introduction of Binance Smart Chain (BSC) was in the last quarter of 2020 as a parallel blockchain to Binance Chain. It is a chain that allows for smart contract creation.

Not up to 12 months of existence, there have been several decentralized finance projects built on it. As there are several projects, instances of scams and hacks have been recurring on the protocol.

Different cases of rug pull have been happening on BSC. Rug pull is a malicious act in the crypto industry, dumping projects, and users’ funds are taken away by developers. This act occurs mainly on DEX and also in the DeFi ecosystem. Rug pullers create tokens, list them on decentralized exchanges, pair them with leading crypto or stable coins. After a while, they abandon the project.

In March 2021, TurtleDex, a file storage DeFi project on Binance Smart Chain believed to have rug pulled with close to $2.5 million funds drained from pools on PancakeSwap and ApeSwap that are BSC decentralized finance exchanges.

Read also: Is it Uniswap V3 or Uni-flop V3? Which is it? 

Value DeFi and Spartan protocol are the recent scam victims on Binance Smart Chain. Spartan Protocol is a liquidity platform for synths and attacked on the 2nd of May, which resulted in a loss of thirty million USD for the protocol.

ValueDefi Automated Market Maker known as Vswap lost $11M  worth of cryptocurrencies to scammers in a pool. This is the second attempt in seven days as about $6m was lost due to contract reinitialization.

Binance Smart Chain has only twenty-one validators  selected from the network. These validators are accountable for validation and the health of the system. In comparison with other blockchains, 21 validators on the chain make it centralized. The compromising of BSC on the decentralization part gives cyber hunters some points of failure they should look to exploit.

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