BREAKDOWN: So Now They’re Hacking DeFi Protocols Before They’ve Even Launched?
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 29 September 2020
⏱️ 12 minutes
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Summary
When the DeFi degens caught wind of a new pre-release Andre Cronje project they piled in, only to get $16 million hacked away in a flash.
This episode is sponsored by Crypto.com, Bitstamp and Nexo.io.
DeFi is one of the breakout crypto categories of 2020. Indeed, yield farming and the grand game of “money legos” has been so profitable that many are following every new protocol with rapt attention.
This is all the more true for projects graced by YFI creator Andre Cronje. So when word got out about a new, pre-release game economy engine called “Eminence,” the DeFi degens took advantage of the permissionless nature of DeFi to pump $16 million or so into EMN.
What happened next was arguably the first pre-release hack in DeFi’s history. This episode breaks down what happened and what it means for the fledgling field.
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Transcript
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| 0:00.0 | every opportunity that can be exploited, whether there are actual hacks that we call exploits, |
| 0:06.3 | or whether they're just social hacks, like trying to follow the breadcrumbs to discover a new |
| 0:11.3 | protocol, they're going to be exploited. That's what markets do. Markets create incentives |
| 0:18.6 | for people to find every edge they can. |
| 0:21.9 | We deny that and we forget that at our own peril. |
| 0:27.1 | Welcome back to The Breakdown with me, NLW. |
| 0:31.2 | It's a daily podcast on macro, Bitcoin, and the big picture power shifts remaking our world. |
| 0:37.4 | The breakdown is sponsored by Crypto.com, Bitstamp, and nexo.io, and produced and distributed by CoinDesk. |
| 0:45.3 | What's going on, guys? It is Tuesday, September 29th, and this is the second of two episodes for today. |
| 0:51.6 | I explained this at the beginning of the previous episode on the new |
| 0:55.3 | Coinbase No Politics at Work Policy. But basically, I discovered when I recorded this morning |
| 1:01.3 | that I actually was doing two full shows that were smashed uncomfortably together. So if you |
| 1:06.1 | want to hear about Brian Armstrong and his letter and the response to it, go check out that episode. |
| 1:12.4 | This one is focused on the Eminence hack, a hack of a Defy protocol that hadn't even yet been |
| 1:19.1 | launched. So let's try to bring you up to speed about what happened with Eminence, which you may |
| 1:25.9 | see on Twitter abbreviated as EMN. |
| 1:29.3 | I'm actually going to kick this off with a thread from Sam over at FTX because I think |
| 1:33.9 | he did a good job of summarizing it. He writes, all right, so here's what I gather happened |
| 1:38.9 | with EMN. Andre Crohnier was working on new protocol. It was still in the testing phase not ready to be |
| 1:45.1 | released in case, e.g. it had bugs. He hadn't yet vetted it. It did, in fact, have an exploit. |
| 1:52.4 | People were digging around Andre's code, found what he was working on, and started to talk about it. |
| 1:56.6 | To be clear, Andre hadn't promoted it and wasn't intending it to be used yet. |
... |
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