Bancor suffers a security vulnerability just days after smart contract upgrade

Bancor, a decentralized exchange protocol, suffered a security vulnerability after recently deploying the new BancorNetwork v0.6. The bug would have allowed anyone to use infinite approves to steal nearly $500K of user funds at risk, however, the team was able to save the funds via a white-hack attack. Arbitrage bots noticed this activity and were able to front-run the transactions with profits of $135K but they are expected to return the funds.

Why it matters

• This isn’t the first time Bancor has been hacked. Two years ago it was drained of $13.5 million. In a time when DeFi attacks seem to happen regularly, user trust may become a differentiating factor between competing protocols in which case even minor attacks like this could be a setback.
• The v0.6 upgrade was supposed to be one of the last steps before the upcoming Bancor v2 upgrade. Despite the potential hurdle created, the team believes it will not delay the target release.