Jimbos Protocol Falls Victim to Major Hack

Jimbos Protocol is the latest decentralized finance (DeFi) protocol in the cryptocurrency industry to suffer a hack resulting in a significant loss of funds, adding to the growing number of such incidents.

According to the blockchain security firm PeckShield, the liquidity protocol of the Arbitrum system, Jimbos Protocol, was compromised on the morning of May 28.

The attack resulted in the loss of approximately $7.5 million worth of Ether at the time.

In particular, the attacker exploited the absence of slippage control on liquidity conversions.

The liquidity of the protocol is invested in a price range that does not need to be equal, creating a security flaw that allows attackers to reverse swap orders for their benefit.

Jimbos Protocol, launched less than twenty days ago, aimed to address liquidity and volatile token prices through a novel testing methodology.

However, the mechanism of the protocol was not adequately developed, resulting in a logical vulnerability that created favorable conditions for attackers.

As a result, the price of Jimbo (JIMBO), the underlying token, has decreased by 40%.

According to the findings of PeckShield, the attackers stole 4,090 ETH from the Arbitrum network. Using the Stargate bridge and the Celer Network, they transferred approximately 4,048 ETH from the Ethereum network.

Hacking incidents involving DeFi protocols are not new. Despite reports indicating a significant decrease in attacks compared to previous years, the community remains vulnerable to many exploits.

Despite efforts to improve security measures, the DeFi ecosystem struggles to prevent potential vulnerabilities and unauthorized access.

As an illustration, consider the recent flash loan attack on the 0VIX protocol, which resulted in a loss of nearly $2 million.

The recent hijacking of Tornado Cash, a prominent privacy-focused protocol, was another noteworthy event.

Unknown attackers successfully compromised the system and withdrew substantial quantities of Tornado Cash (TORN) tokens, resulting in significant financial losses.