Origin Protocol Loses $7M in Latest DeFi Attack

Stablecoin project Origin Dollar (OUSD) sustained a re-entrancy attack at 00:47 UTC Tuesday resulting in a loss of funds worth $7 million.

AccessTimeIconNov 17, 2020 at 2:06 a.m. UTC
Updated Aug 19, 2021 at 5:40 a.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

Stablecoin project Origin Dollar (OUSD) sustained a re-entrancy attack at 00:47 UTC Tuesday resulting in a loss of funds worth $7 million, including over $1 million deposited by Origin and its founders and employees.

The team has disabled deposits and the price of the project's native token is down 85% since the attack, according to CoinGecko.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • Origin urged people not to buy OUSD on Uniswap or SushiSwap as those prices don't reflect the token's underlying assets. As CoinDesk reported in September, OUSD is backed by deposits of USDT, USDC and DAI and is designed to act somewhat like a savings account.

    Tuesday's attack utilized a flash loan and flaws in OUSD contracts to initiate what is known as a "rebase," according to Etherscan and an updated blog from the team. The attack artificially inflated the supply of OUSD tokens within the protocol before swapping the newly printed tokens on SushiSwap and Uniswap for USDT, the blog states.

    Origin wrote in an update:

    "The attacker was able to create a rebase event inside the second mint after funds had moved to OUSD from the first large mint, but before the supply of OUSD increased. This created a massive rebase for everyone in the contract, including the attacker. The attacker then also received their first large OUSD mint, giving them in total more OUSD than the contract had assets."

    Early reports indicated Origin Protocol had suffered a $3.5 million flash loan attack or pricing oracle attack. Although the attacker employed a flash loan, Origin has not cited oracle manipulation as the technical culprit.

    "This has been a rough day for everyone involved, but we're not going anywhere. We're still here and will be working to rebuild," Origin Protocol co-founder Josh Fraser told CoinDesk in an email at 06:16 UTC, adding:

    "We'll be continuing to post updates with our community as we learn more. We want to express our gratitude to the community for the outpouring of support. We ask for continued patience as we work to recover the funds and make things right."

    UPDATE (Nov. 17, 05:53 UTC): Adds Origin's confirmation of the attack, an updated figure and information on the attacker's technique.

    UPDATE (Nov. 17, 06:22 UTC): Adds comment from Origin co-founder Josh Fraser.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.