Binance Smart Chain-based Bogged Finance Falls Victim to Flash Loan Attack, BOG Tanks 98%

Bhushan Akolkar
May 23, 2021
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The Binance Smart Chain (BSC) is becoming more vulnerable to flash loan attacks on the DeFi protocol running over the platform. On Saturday, May 22, BSC faced a second such attack in a week’s time with the victim being the Defi protocol Bogged Finance (BOG). Earlier this week, a similar incident was reported for BSC-based Pancake Bunny (BUNNY).

The Bogged Finance (BOG) token price crashed 98% dropping from $8.6 all the way to hitting an intraday low of $0.29. However, the BOG token price has pulled back from the low and is currently trading at $1.95 with a market cap of $4.5 billion.

Courtesy: CoinMarketCap

Blockchain security and data analytics firm PeckShield recently reported the attack earlier today. As per their root cause analysis, The Bogged Finance Defi protocol was exploited by attackers while inflating the BOG balance. The attackers then minted a massive $3.6 million in profits while liquidating the BOG tokens. The analysis noted:

“The incident was due to a bug that allows the attacker to increase the balance via self-transfer. While it appears to be a flashloan attack, it is a flashswap-assisted one”.

Bug In BOG Token Contract

As reported by PeckShield, the incident happened through the exploitation of a bug in the BOG token contract. The contract in reality has been designed to be deflationary in nature by charging 5% of the transferred amount. Of this 5%, 1% is burned and the remaining 4% is taken as a fee for staking charges.

At the same time, the token contract implementation only charges 1% of the transferred amount but still inflates the 4% as the staking profit. The blog post notes:

“As a result, the attacker can take advantage of flashloans to significantly increase the staking amount and repeatedly perform self-transfers to claim the inflated staking profit. After that, the attacker immediately sells the inflated BOG for about $3.6M WBNB”.

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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.