In the sprawling landscape of blockchain-based trading, LeetSwap, a decentralized exchange running on Coinbase’s Base network, announced a temporary pause in trading activities. This decision was rooted in fears of a possible security breach. On the first day of August, LeetSwap revealed via a tweet that some of its liquidity pools might be compromised. As a precaution, the exchange suspended trading to conduct a thorough investigation.
Unraveling the Security Concerns: Experts Step In
In an attempt to resolve the incident, LeetSwap engaged on-chain security experts. Their primary objective was to recover the potentially locked liquidity within the trading platform.
The exchange remained tight-lipped on the specifics. However, several blockchain analysts have since proffered explanations of the probable exploit.
Igor Igamberdiev, the research head at algorithmic market maker Wintermute, theorized that the attacker exploited a vulnerable smart contract function. This breach allowed the attacker to artificially inflate a token’s price, enabling them to siphon wrapped Ether from LeetSwap’s liquidity pools.
Adding to the gravity of the situation, Igamberdiev estimated the attacker’s spoils to be a substantial 342.5 ETH. This haul, at current market value, stands at over $630,000.
Multiple blockchain security firms, including industry leaders PeckShield, Beosin, BlockSec, and CertiK, have echoed Igamberdiev’s hypothesis. Their separate tweets confirmed the theory behind the exploit and the alarming amount illicitly extracted from the exchange.
LeetSwap’s Actions Post-Halt: Towards Recovery
Approximately 90 minutes after publicizing the trading halt, LeetSwap issued another update. The exchange affirmed its ongoing collaboration with security experts, aiming to unlock the liquidity tied up on the platform.
Through these ongoing efforts, LeetSwap aspires to swiftly resolve these security concerns, paving the way for a secure and reliable decentralized trading environment. This unfolding event underscores the importance of robust security protocols in the rapidly expanding world of decentralized finance.
Unfortunately, LeetSwap is the latest incident for the Base layer-2 network. An earlier rug pull of the BALD meme coin cost investors money. The coin’s developer removed liquidity yet refutes claims of pulling an exit scam.