DeFi bug results in loss of $8m in Ethereum, Chainlink, and stablecoins

What's crazy is that DeFi went months without a hack or a major bug that resulted in a loss of user funds despite a strong uptick in users, capital in the space, and a sheer number of protocols.

13, the latest major DeFi bug/hack took place with bZx protocol, a money-market and on-chain trading platform based on Ethereum.

8m in Ethereum, Chainlink, and stablecoins lost due to bug in bZx Protocol.

13, users and bZx itself took to Twitter to warn DeFi users that something was up with the protocol.

At the time, the team behind the Ethereum-based project asserted that no user funds were lost in the then-mysterious attack.

Some were still worried as some analysts noted that millions worth of coins like Ethereum, Chainlink, and stablecoins were withdrawn to an Externally Owned Account - an account that isn't a smart contract, seemingly owned by someone outside the protocol it was interacting with.

The team will be backstopping users of the protocol with an insurance fund, which will ensure that no users will end up with fewer funds than they had before the attack.

Although any losses will be recovered by bZx's insurance fund, it was just revealed that the "Missing funds are now restored."

We are relieved to announce that the missing funds are now restored.

It is not too clear why this is the case but like with the dForce hack, it may be that users managed to figure out who the attacker was, then threatened to call law enforcement if the funds were not returned in time.