Another Day, Another Hack… Almost!

How a Paradigm researcher prevented another disastrous hack and why it’s kind of ironic


Hey DEFI TIMES community,

This week, a researcher at Paradigm, called Sam Sun, prevented another disastrous hack that could have threatened hundreds of millions of dollars.

Last week, we talked about the Poly Network hack, where a hacker was able to remove over $600 million from the protocol’s token bridge. Luckily, the hacker gave back almost all of the funds!

This time, things could have gone wrong… almost!

Sam Sun explained how he examined the smart contract code for the BitDAO token sale. BitDAO has completed a token sale worth over $365 million - with over $230 million from Peter Thiel, Pantera Capital, Dragonfly Capital, and other partners. It was one of the largest token sales in the history of DAO’s.

Sam Sun pointed out that there was a critical bug that could have threatened the whole $365 million.

Sun didn’t expect to find any bugs at first:

“I didn’t really expect this to be a vulnerability though, since I didn’t expect the Sushi team to make such an obvious misstep.”

After looking closer, he found a bug in the Miso Dutch auction contract. In fact, some of the functions apparently lacked access controls.

He tested the bug with a successful exploit and immediately contacted his colleagues Georgios Konstantopoulos and Dan Robinson to double-check.

“Suddenly, my little vulnerability just got a lot bigger. I wasn’t dealing with a bug that would let you outbid other participants. I was looking at a 350 million dollar bug.”

After that, Sam Sun contacted SushiSwap CTO Joseph Delong to rescue the funds. The SushiSwap and BitDAO team acted quickly: BitDAO manually ended the auction by buying the remaining allocation. Funds were safe!

But things could have gone differently! Why?

There’s a conflict of interest between SushiSwap and Paradigm. It’s widely known that Paradigm has a significant stake in Uniswap. Since SushiSwap is the main competitor of Uniswap, Paradigm basically saved their biggest enemy.

I wonder what would have happened if Sam Sun just left the bug to be naturally discovered. I think this would have significantly damaged SushiSwap’s reputation. It probably wouldn’t have killed SushiSwap completely, but Uniswap would have profited in a big way.

Things like this only happen in crypto!


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DISCLAIMER: All information presented above is meant for informational purposes only and should not be treated as financial, legal, or tax advice. This article's content solely reflects the opinion of the writer, who is not a financial advisor.

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