Synthetix Users Returns $1 Billion After An Oracle Issue With Their Exchange Platform
- Synthetix user returns $1 billion after the project was affected by an Oracle issue
- The user will be recompensed with a bug bounty
In a recent blog post, the founder of the platform, Kain Warwick, explained that an error that allowed a user to gather $1 billion in profit has been fixed and the user accepted to give back the transaction in exchange for a bug bounty. There are many firms and blockchain projects that have bug bounties for developers to find problems and report them to the company.
Synthetix User Returns $1 Billion In Funds
Mr. Warwick explained that situation saying that one of the APIs they use began to report a price 1000x higher than the current rate for the Korean Won. Although their price oracle has a mechanism for discarding outliers, the price feed for KRW was only being served by two APIs due to a previous unrelated outage.
This means that the Oracle took an average of the two remaining KRW prices. In order to solve this situation, he mentioned that they have added more robust exception handling to ensure that this kind of error does not happen anymore.
Currently, there are different trading bots trading on the Synthetix-exchange that have different strategies. One of the bots was programmed in order to trade during periods in which the API reported the price incorrectly. This is why a user was able to register a profit of 1000 times that resulted in more than $1 billion profit in less than an hour.
https://t.co/SEIiP458Ne Definitely a rough day, but I am proud of our team and community in handling this issue. No funds were lost, the owner of the bot who exploited the issue agreed to reverse the trades.
— kain.eth (@kaiynne) June 25, 2019
The community saw this problem and alerted the team behind the project. Moreover, the CTO stopped the Oracle service from sending rates to the contracts, which halted the transfers and trading within the system.
Due to this issue, they have been in contact with the owner of the bot that agreed to reverse the trades in exchange for a bug bounty. After all these issues, the platform has resumed trading and transfers within the system.
About oracles, Mr. Warwick commented:
“We are very conscious of the challenges in using oracles for price feeds and we will continue to improve this and all other aspects of the Synthetix system. Chainlink is a key partner in our move towards a more robust and decentralised oracle, and we look forward to working closely with their team to improve our Oracle.”
Blockchain oracles are a system that provides the necessary external data so as to execute a smart contract. Once the terms of a specific smart contract are met, it gets executed. There are different companies in the crypto market that have rewarded users for reporting bugs.