A Polygon-Based DeFi Protocol Faces Exploit

In the latest string of cyber-attacks, it would now appear as if Polygon has been targeted following weeks of BSC (Binance Smart Chain) based protocols being exploited via flash loans. The list of various platforms suffering huge losses as funds continue to decrease grows ever larger, with the DeFi stablecoin known as SafeDollar now becoming the most recent victim.

While it has not yet been confirmed as to whether this attack was conducted by utilizing the aforementioned flash loan exploit technique, we cannot rule out that possibility as details provided about the SafeDollar exploit are thin as of this time.

SDO is now worthless

In the past few hours, various websites which provide DeFi analytics, such as RugDoc and DeFiPrime, had posted numerous incident alerts pertaining to the attack on SafeDollar. As per the contact address displayed on the dashboard of Polygon Scan, a total of $248 million in both USDT and USDC had been taken out from the abovementioned protocol earlier today. Furthermore, the platform now shows that the SDO stablecoin’s worth has now indeed decreased to $0. No updates were available as of this time on SafeDollar’s Twitter account.

It had been through Telegram that a warning had been issued of the imminent attack as well as the urgency of investors to stop all trading activities regarding SDO. To make things worse, this is not even the 1st time that an exploit had taken place on the protocol. On the 22nd of June 2021, SafeDollar had outlined a post mortem for another attack that had previously caused a huge loss of nearly 10,000 SDS tokens, which were valued at just about $95,000 at that given point in time.

Rug pull

The protocol is now the most recent platform based on Polygon to have suffered an economic meltdown or exploit. Earlier on in June, another protocol by the name of Malt had also undergone a similar collapse. Furthermore, on the 22nd of June, it had been revealed that Polywhale’s team had been responsible for conducting a ‘very soft rug pull’ via the dumping of tokens as well as officially ending the project.

SafeDollar had previously launched its own IDO onto PolyDEX’s launchpad. This had occurred on the 14th of June this year, and the abovementioned current exploit has thus taken place only a couple of weeks later, thereby suggesting the possibility of more rug pulls similar to what had transpired with the Titan token, although that had occurred on a BSC protocol.