According to ME News, on July 22 (UTC+8), SlowMist released an analysis stating that the attack on 42DAO occurred because the attacker exploited an abnormally low BTCB price from the Median Oracle, using the 'poke' function in the Spotter module and the 'bark' function in the Dog module. The Spotter module lacked price deviation checks, maximum drawdown limits, and minimum price protections, allowing the abnormal low price to be directly written into the Vat account. Subsequently, the Dog module, without any liquidation delay or oracle price verification, used this updated spot price to instantly liquidate multiple BTCB vaults, enabling the attacker to profit from arbitrage. Previously, Foresight News reported that Balance Coin (BLC), the native algorithmic stablecoin incubated and deployed by 42DAO, was hacked, causing BLC’s price to plummet by 99% and resulting in approximately $915,000 in losses for 42DAO. (Source: Foresight News)
The 42DAO attack exploited the oracle's abnormally low BTCB price to liquidate BTCB vaults.
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Summary
On July 22 (UTC+8), attackers exploited an abnormally low BTCB price from the Median Oracle to trigger liquidations in 42DAO’s BTCB vaults. Using the 'poke' and 'bark' functions, they bypassed critical safeguards such as price deviation checks and minimum price protection. The Dog module then executed liquidations without delay or validation, enabling arbitrage. This incident adds to growing concerns about altcoins to monitor amid volatile cryptocurrency price movements. Previously, 42DAO lost approximately $915,000 after its stablecoin was compromised.
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