With the emergence of new technological methods and software, the world is surely progressing at a very high pace and is trying to bring development in each sphere of life. Technology, undoubtedly, has many advantages that have helped mankind achieve the heights of success. However, there are certain aspects where it has also proven to be a bane for society. And most recently, the financial sector has to bear the brunt of it as well.
What happened and how?
The Omni, which functions as an NFT platform that has taken on the responsibility of lending crypto in exchange for NFTs got hacked by some hackers. It became the story of re-entrancy exploit and had to incur huge losses that propelled the whole system to distress. It lost somewhat about 1.4 million dollars, which is estimated to be the value at the time this event occurred.
There are numerous reasons, as cited by experts, why the system was hacked and how it lost so much money. One of the reasons cited was that it was due o the bad faith staking of NFTs. The project, in focus, lost the money from the Doodle collection, to be more specific. The hack was carried out with proper planning and was executed quite systematically as well.
How did the hacker carry out the job?
It has been exposed that the hacker first deposit doodles in a form of collateral and took wrapped ETh as a loan from the same system. After successfully securing the loan, the perpetrator was then able to draw all of the deposited doodles with utmost ease but left behind only one.
After carrying out this task quite successfully and after the completion of the tasks, the doodle that was left in the system was insufficient to cover the debt taken. It gave rise to a situation where the position was liquidated, which led to the doodles getting back to the hacker again. The attack, in other words, tool the loan and did not have to deposit anything in return for it as well.
What steps have been taken to stop such hackers?
Various steps have been taken to attempt to stop such hacks from being done by the attackers. In one such attempt, an open appeal was made to the attackers to return whatever they have stolen from the system. In the appeal, they even mentioned that the events that occurred would be treated as a white-hat event if all the stolen items were returned to the system. They appealed to the attackers to return if not all, but most of the items that were stolen by them.
This appeal, which may sound weird to some, has worked out quite efficiently in some cases. There have been instances where the perpetrators have quite easily returned the stolen items. However, in m this ca such appeals have been rejected or ignored by the perpetrators who kept on hacking systems and stealing from them.
There have also been some cases where the importance of an appeal boils down to nothing. In these cases, the hackers as soon as they get their hands on the funds, end it to Tornado which uses away the origin of the funds. This source, that is, Tornado, is often said to be used by those who are involved in such illegal activities to carry out the act of stealing from different systems. THE Omni protocol which was still in beta mode has been closed down by the Devs who are in charge of it. However, it has been confirmed by those in charge, that the funds that belonged to the customers were not affected by it.