Developers behind the Arbitrum-based Jimbos Protocol are gauging the best way for the project to move forward after its version 2 (V2) faced a $7.5 million exploit over the weekend.
Jimbos said it was working with security researchers to reclaim lost funds – the same people who’ve previously helped Euler Finance recover over $200 million – and added that they would contact law enforcement by 4 P.M. UTC on Monday if the attacker failed to return the money.
Quick update:
We are already working with multiple security researchers and on-chain analysts who helped with both the Euler Finance and Sentiment exploits.
We will start working with law enforcement agencies tomorrow by 4PM UTC if this isn’t sorted out by then.
— Jimbos Protocol (v2, soon) (@jimbosprotocol) May 28, 2023
Jimbos lost 4,090 ether (ETH) late on Saturday, which security analysts blamed on the lack of slippage control in the main contract. This allowed the yet-unidentified attackers to take out a $5.9 million flash loan, manipulate the prices of jimbo (JIMBO), and walk out with treasury funds.
The protocol planned to issue a semi-stable token backed by a basket of crypto tokens, alluring traders to this concept as similar projects have seen brief success.
Flash loans are a popular way for attackers to gain funds to conduct exploits on decentralized finance (DeFi) systems. The loans allow traders to borrow unsecured funds from lenders using smart contracts instead of third parties.
These do not require any collateral because the contract considers the transaction complete only when the borrower repays the lender – meaning a borrower defaulting on a flash loan would cause the smart contract to cancel the transaction, and the money would be returned to the lender.
Recommended for you:
- Bankman-Fried’s Alameda Research Joins Chorus Objecting to BINANCE Voyager Buy
- Binance.US Can Move Ahead With Plan to Acquire Voyager Digital's Assets, Judge Rules
- Bitcoin Breakout Has Opened Doors to $25K: Analysts
Meanwhile, JIMBO, its token, traded at nearly 18 cents on Monday, slightly recovering in Asian morning hours as developers floated their protective plans.
Edited by Sam Reynolds.
