Fulcrum and bZx to use Chainlink after theft of 350.000 USD in Ethereum

  • The Ethereum based protocol bZx and its Fulcrum platform will diversify its price feed through Chainlink’s oracles.
  • The company launched an upgrade for Fulcrum and seeks to prevent future attacks on its protocol.

Between Friday, February 14 and Saturday, February 15, the Fulcrum trading and lending platform was attacked. Yesterday, CNF reported on the event. So far the facts are based on speculation. But it is known that the attack was multi-layered. The attacker took a 10,000 ETH flash loan and used half of the ETH to get another loan in Wrapped Bitcoin (wBTC) through the Compound protocol.

The other half of the ETH went to Fulcrum as collateral in a wBTC bet. The attacker bet that the price of the wBTCs would fall. The attacker then dumped the wBTCs on Uniswap and caused the price to crash in order to collect the profits from the Fulcrum shorts and pay off the initial flash loan.

An investigation by DeFi Pulse, the platform for monitoring the DeFi sector, revealed that the attacker took the flash loan via the dYdX protocol. The complexity of the attack has divided the crypto community. Some are hesitant to call it an attack, arguing that it is a cunning trading maneuver. However, it is undeniable that other traders who also use Fulcrum may have seen their investments compromised.

The team behind Fulcrum, bZx, has responded assertively and stated that no user will lose funds. Fulcrum is a UX-focused dapp for loans and trading launched in June 2019. The dapp uses the decentralized bZx protocol that allows its native dapps to trade and make loans on margin and leverage.

Fulcrum cooperates with Chainlink for more security

After releasing an update for Fulcrum that will prevent similar attacks in the future, bZx has focused on improving the security of its platform. The update was released yesterday, February 16th at 10:30pm MTS.

It was speculated that part of the vulnerability in the protocol was due to Fulcrum’s lack of diversity in calculating their prices. bZx claimed that they use Kyber’s‘s liquidity protocol to determine their prices, the same protocol that is used by Uniswap. This allowed the attacker to manipulate the price of wBTCs relatively easily.

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A bZx representative recently stated that they will integrate Chainlink into the Fulcrum protocol. Through the oracles of Chainlink, bZx can diversify its price feeds what will make a similar attack impossible in the future. The bZx team agreed to reveal the full report today, February 17. Once the details are known, an update on the most important findings will follow.

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About Author

Reynaldo Marquez has closely followed the growth of Bitcoin and blockchain technology since 2016. He has since worked as a columnist on crypto coins covering advances, falls and rises in the market, bifurcations and developments. He believes that crypto coins and blockchain technology will have a great positive impact on people's lives.

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