The attack was flagged on Twitter by blockchain security firm PeckShield, which said the attacker made away with at least USD 80 million in crypto, although the losses suffered by the protocol were much larger. The market for Beanstalk’s BEAN stablecoin collapsed as a result of the attack. At press time, the token was down 86% from its USD 1 peg according to CoinGecko.
When reached for comment, Beanstalk pointed CoinDesk to a post in its Discord server summarising how the attack occurred. According to the summary, the attacker took out a flash loan on the lending platform Aave which enabled them to amass a large amount of Beanstalk’s native governance token, Stalk. With the voting power granted by these Stalk tokens, the attacker was able to quickly pass a malicious governance proposal that drained all protocol funds into a private Ethereum wallet.
Project leads wrote in the attack summary: ‘Beanstalk did not use a flash loan resistant measure to determine the % of Stalk that had voted in favour of the BIP. This was the fault that allowed the hacker to exploit Beanstalk’.
Beanstalk’s smart contracts were audited by the blockchain security firm Omnicia. However, the audit was completed before the introduction of the flash loan vulnerability, the firm said in a post-mortem. Beanstalk declined to provide details to CoinDesk regarding whether funds would be reimbursed to users, saying more news will be coming in a town hall event.
According to PeckShield, the attacker appeared to donate USD 250,000 of the stolen funds to a Ukrainian relief wallet.
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