Rubic Exchange Taken For $2 Million

about 2 years ago

In today's edition of YIYL, (You Invest, You Lose) we had back to the so-called DEFI land where the only thing being decentralised is you from your money, most of these protocols you see today are reskinned contracts taken from a GitHub, and playing broken telephone and no one cares.

If you've played broken telephone you'll know that the message quickly gets diluted and becomes an abomination and while good fun, shows you how things can quickly get lose in translation. In the DEFI space plenty of code is open sourced and alot of developers know they can be lazy and do some copy pasta and make bank from these VC's and retail willing to buy and hold the shitcoin backing the ecosystem.

Part of it, is just thinking that this won't be around very long so why do a good job, the other is, well we made our exit on our token so who really cares what happens to this project now, it's a zombie. But even zombies can provide a positive return for the holders of the contract if your marketing cost is lower than the number of people buying your token thinking they are going to get rich.

While people continue to fall for the marketing, the evidence is clear to see, that this isn't something that is meant to last in it's current form. Shitcoin shills will try to look for silver linings, like oh it's part of how the market matures, some of it works, some of the time and all that horse shit, but why is there a fuck up nearly every day for someone to show you and then only for you to dismiss it?

So today attempt at waking you people up comes from a shitcoin DEX.

Rubic, more like Rube Goldberg

A DEX is a smart contract built casino that talks to different blockchains and allows you to swap assets between them, be that tokens or the native chain. Since there are so many fucking EVM chains right now, they've become popular out of the complexity of chasing yield, so let's say a DEFI app is paying out X on ETH and another on TRON, these dex's allow you to move quickly to go capture that return.

In return, they pocket the fees for you swapping in and out of assets. Another popular use case is if someone pays you in USDT on lets say BSC but you need to sell it to buy something but the other person accepts USDT on Polygon, so you can swap between the chains easily and pay for whatever you need.

Now when you take on the task of condensing all this backend complexity into a simple interface for normies to get rekt on, you also take on a lot of risk, with nodes, oracles and chains and having liquidity for all pairs.

It's not an easy operation, and while Uniswap and Pancake swap make it seem like its a no brainer, there is a lot of security and resources behind those platforms to keep them running. Rubic is a copy of the model, but it seems like they want to support even more chains, which can only end badly but im just a guy on the internet with common sense, what do I know?

Rubic gets mixed up

According to reports Rubic security ain't so hot and an attacker was able to compromise the private key of an admin wallet for the Rubic crypto exchange. Once they had access to the wallet they transferred around 34 million Rubic tokens, the native token of the exchange to their own wallet.

The attacker then sold the tokens on other exchanges Uniswap and PancakeSwap, where there isn't much liquidity.

“One of our admin’s wallet addresses was compromised. This wallet managed the RBC/BRBC bridge and staking rewards,” developers said in a tweet during morning hours in Asia. “We suspect it was malicious software that was used to get access to the admin wallet's private keys.”

https://twitter.com/CryptoRubic/status/1587801263781171203

Talk about the price

When you have a motivated seller who just wants to get rid of tokens and doesn't care about slippage you're going to have a bad time on holding up any price, this person just wants to get some money for their tokens and doesn't care about maximising returns, so it would reflect in the market price as they dump into whatever buy orders are available.

Screenshot 20221105 at 11.58.53.png

The enormous sale caused the token price to plummet from $0.082 to $0.016, over an 80% decrease. The stolen tokens were nominally worth almost $2.8 million (priced at the value before the theft), but since liquidity is razor thin they could not realize the full value by dumping the tokens.

Rubic recovery plan

As is the case with these things the tech company behind the service are threatening legal action should they not reach terms with this user, but are willing to consider a generous offer to settle this without the need for involving authorities.

The team of the so-called decentralized exchange claim that they won't proceed with the investigation if the hacker decides to return 80% of the stolen funds. Rubic is offering the user the chance to keep 20% of the assets as part of the bug-hunting campaign without any legal consequences which in my opinion isn't a bad offer, if you can't dump it, might as well return it and bleed out your position on the 20% slowly.

This is yet another example in a long line of them showing how fragile these systems are and how paper thin the so-called wealth you see in these systems is, but since no one takes the time to really look at it, and only take numbers at face value there will always be a cohort of newbies and naive traders who will get caught up in these messes and get rekt.

Again, no sympathy on my part and HFSP.

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