Jimbos Protocol, which is a liquidity protocol of the Arbitrum system in the decentralized finance (DeFi) space, has become the latest victim of a hacking attack. The attack resulted in the loss of 4,000 Ether (ETH), worth approximately $7.5 million at the time. PeckShield, a blockchain security firm, reported that the attack occurred on May 28 due to the lack of slippage control on liquidity conversions in Jimbos Protocol. As the liquidity is invested in a price range that does not need to be equal, the attacker took advantage of the loophole created by the protocol’s mechanism and reversed swap orders to extract the funds. This attack has exposed the vulnerability of the DeFi ecosystem and the need for better security measures.
DeFi Hacks Are Not Uncommon
DeFi protocols have been victims of hacking incidents in recent years. Although the number of attacks has decreased compared to previous years, the community is still exposed to numerous exploits. Despite efforts to enhance security measures, the DeFi ecosystem continues to grapple with the persistent challenge of safeguarding against potential vulnerabilities and unauthorized access. For instance, the 0VIX protocol suffered a flash loan attack resulting in a loss of nearly $2 million, while unknown attackers successfully compromised the Tornado Cash protocol and extracted significant quantities of Tornado Cash (TORN) tokens, leading to substantial financial losses. These incidents have raised concerns about the security of DeFi protocols and highlighted the need for better security measures.
Launched less than 20 days ago, Jimbos Protocol aimed to address liquidity and volatile token prices through a new testing approach. However, the protocol’s mechanism was not adequately developed, leading to a logical vulnerability creating favorable conditions for attackers. As a result, the price of the underlying token, Jimbo (JIMBO), has plummeted by 40%. PeckShield’s findings revealed that the attackers extracted 4,090 ETH from the Arbitrum network and transferred approximately 4,048 ETH from the Ethereum network using the Stargate bridge and the Celer Network.
Jimbos Protocol has become the latest DeFi protocol to suffer a hacking attack, resulting in a significant loss of funds. This incident highlights the need for better security measures in the DeFi ecosystem to safeguard against potential vulnerabilities and unauthorized access. While the number of attacks has decreased compared to previous years, the community continues to be exposed to numerous exploits. Therefore, it is crucial to develop better security measures to protect DeFi protocols and ensure the safety of users’ funds.