Qubit Finance Protocol Loses $80 Million on an Exploit

Decentralized Finance (DeFi) protocols work because of smart contracts, but sometimes hackers find a way of exploiting them.

Qubit Finance announced on their Twitter profile that the protocol was exploited, as you see in the tweet below:

The protocol was exploited by;
0xd01ae1a708614948b2b5e0b7ab5be6afa01325c7
The hacker minted unlimited xETH to borrow on BSC.
The team is currently working with security and network partners on next steps.
We will share further updates when available.

— Qubit Finance (@QubitFin) January 28, 2022

Following the Qubit hack announcement, a blockchain security company named PeckShield said that the hacker exploited a smart contract and minted a certain amount of xETH and put it as collateral to take approximately $80 million of the pool funds. According to BSCscan, the hacker address has 206,809 BNB.

The team behind Qubit Finance has messaged the attacker to offer him a bounty. They are also taking actions such as contacting Binance and other security companies.

What Is Qubit Finance?

It provides lending and borrowing services via a decentralized finance (DeFi) platform built on Binance Smart Chain. 

One of Qubit Finance’s main features is the “X-Collateral Bridge”, a cross-chain service that allows users to collateralize their assets on other chains without moving tokens from one chain to another, turning them into “xETH”, so they can borrow assets. This was the smart contract that was exploited.

The protocol has over $730 million Total Value Locked (TVL), and QBT is its native governance token.

How Has QBT Price Reacted to the Hack?

QBT token is not having a good day, the cryptocurrency is down about 26% in the last 24 hours.

The cryptocurrency is trading at the time of writing at $0.00461994, the sharp drop occurred just after the hack, according to CoinMarketCap.

According to DeFiYield’s Rekt data, the Qubit hack puts them as the seventh-largest DeFi protocol hack.

In the crypto world, hacks are still happening, and it’s something to always keep in mind. Last week, the Multichain protocol was hacked multiple times, and last month BitMart, a centralized exchange, lost around $200 million worth of crypto.