Decentralized fundraising platform Poolz Finance has just become the poster child for how DeFi protocols should respond to hacking incidents.
This week, within minutes of being hacked, it implemented a series of measures that not only helped to contain the damage and prevent it from spreading, but almost certainly stopped the hacker from profiting from his or her ill-gotten gains.
Poolz Finance is a decentralized swapping protocol that aims to provide a way for crypto startups and project owners to bootstrap liquidity. It works by making it simple for project owners to launch and manage liquidity auctions that investors can easily discover and participate in.
Although it’s a relatively new protocol, Poolz Finance has seen some success already, making it a target for the individual who discovered a vulnerability within the smart contract governing its POOLZ token vesting system. On March 15, the hacker managed to exploit this vulnerability and make off with an undisclosed number of POOLZ tokens that had been allocated to public buyers. The BscScan blockchain explorer shows that some of these tokens were rapidly sold on DEXs or exchanged through the cryptocurrency mining service Tornado Cash.
Unfortunately for the hacker, he or she didn’t move fast enough. Poolz Finance reacted by creating a response team that moved quickly to ensure that no POOLZ tokens could be traded on any exchange, while implementing other measures to prevent the incident from happening again.
One of the very first steps was to identify the hacker’s address and flag it on multiple blockchain explorers. At the same time, Poolz Finance worked with the Uniswap and PancakeSwap DEXs to remove all liquidity from their exchan ..
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