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Beanstalk Begins Revamping the Protocol After the $182 Million Hack

By:
Aaryamann Shrivastava

The hack was carried out by exploiting a previously unknown issue that the protocol's governance process was vulnerable to.

Beanstalk Begins Revamping the Protocol After the $182 Million Hack

In this article:

Key Insights:

  • Beanstalk confirmed today that $76 million was stolen out of the protocol.
  • The exploiter used a flash loan to take advantage of the protocol’s governance mechanism.
  • Moving forward, the team has proposed four primary goals for the Dapp.

As reported by FXEmpire yesterday, Ethereum-based Decentralized Finance (DeFi) application Beanstalk Farms suffered an exploit.

Initial reports indicated that approximately $182 million were stolen out of the protocol, but in a press release, the Beanstalk Farms team has confirmed that only $76 million were actually stolen.

Spilling the BEANs on the Attack

According to the team, in order to pull off the exploit, the hacker used a flash loan to exploit the protocol’s governance mechanism and then sent the funds to a wallet that was controlled by them.

Although the team was alerted as soon as the attack occurred, it was too late to stop the hacker, but the team temporarily shut off the protocol governance and also paused the entire application.

However, the attacker managed to get away with $76 million from Beanstalk’s liquidity pools, but the rest of the BEAN left in the exploiter’s contract has been burned by the team.

But the one thing that the protocol did not lose was its community’s support, who even helped by providing suggestions on how to go forward now. The Beanstalk Farms team thus created a new proposal with four primary goals.

Firstly the team will be focusing on securing the enduring success of Beanstalk’s economic model. Secondly, they will be attracting sufficient capital to restart Beanstalk.

The third goal is to preserve as much of each Farmers’ Stalk, Seed, and Pod position as possible. And finally, the team will be aligning new capital with previous Stalk and Pod holders.

Stablecoin and Their Rise

One of the crypto space’s oldest members has been the stablecoins, and after a slump in the last few years, it appears that stablecoins’ demand is rising again.

As reported by FXEmpire, USDT and USDC already have the highest domination of any asset, but the growth rate of the Stablecoins right now is faster than the rest of the market, according to Arcane Research.

However, most of the stablecoins are collateral or crypto-backed, but with DAI, DFI, and others, the presence of algorithmic stablecoin is somewhat meek right now.

The Beanstalk Farms also issued an algorithmic stablecoin, BEAN, on Ethereum, and by eliminating collateral requirements, Beanstalk aims to be the catalyst for a trustless solution to unlock the universal potential of decentralized finance in the future.

When that happens will be known only after the protocol recovers from this attack.

About the Author

Holding a Mass Media Degree has enabled me to better understand the nitty-gritty of being a journalist and writing about cryptocurrencies’ news and price movements, effects of market developments, and the butterfly effect of individual assets nurtured me into a better investor as well.

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