Thala protocol resumes operations after $25.5m exploit

As a seasoned analyst with years of experience in the ever-evolving world of decentralized finance (DeFi), I must say that the recent incident involving Thala is yet another stark reminder of the challenges and risks inherent in this space. While it’s encouraging to see Thala taking swift action, freezing assets, and collaborating with security experts and law enforcement to recover the stolen funds, these incidents underscore the need for increased vigilance and robust security measures.


Finance company Thala resumed activities the following day, having identified a security breach in its liquidity pools that resulted in approximately $25.5 million being taken.

In a post on November 17th, Thala announced that all of its services are now operational again, with the exception of the staking service. This service is currently undergoing repairs and audits.

Yesterday’s announcement revealed that the incident occurred due to a security breach on November 15, enabling an unauthorized party to withdraw substantial amounts of liquidity tokens from the protocol. It is said that this problem originated from the protocol’s v1 farming contracts, where a weakness was inadvertently introduced following a recent update, making it an isolated issue.

Per Thala’s report, all operations were halted promptly following the detection of a security issue, and the system successfully secured approximately $11.5 million in assets associated with Thala. This included the THL token, which is the protocol’s native token, as well as the Move Dollar (MOD).

The operation of Thala was made feasible through the Move programming language, a fundamental component of the Aptos blockchain. Move considers digital assets as top-tier resources and offers inherent features such as freezing and burning directly.

To retrieve the remaining funds, Thala collaborated with SEAL 911, a team of DeFi security specialists, Ogle, an on-chain detective, and law enforcement officials to locate the hacker responsible for the incident. The hacker consented to return all user assets in return for a $300,000 reward.

Thala has guaranteed users that every position will be fully restored, and they won’t need to take any action themselves.

Currently, the amount of funds secured in Thala has decreased from $234 million to $196 million. Over the past period, the value of THL has fallen by approximately 31% since the event occurred.

In the past few months, there have been numerous assaults aimed at decentralized systems like protocols. For instance, on October 16th, the DeFi lender Radiant Capital suffered an attack that resulted in the loss of approximately $50 million. This was made possible by the attackers finding and exploiting a hidden vulnerability within a contract.

In September, approximately $2 million worth of digital assets were stolen from Bedrock, a staking protocol, as a result of a software glitch that enabled hackers to empty the protocol’s liquidity reserves.

Based on reports from cybersecurity company PeckShield, it’s estimated that approximately $88.4 million were stolen through cryptocurrency hacks in October alone. Furthermore, the overall on-chain losses escalated to a staggering $181 million during this period.

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2024-11-18 10:26