Hacked decentralized lending platform bZx has announced that it is meeting with Chainlink. The platform plans to add the Chainlink Oracle protocol to its model. This comes days after its Fulcrum Protocol was hacked and thieves made away with Ethereum worth $645K. The exchange says that after implementing Chainlink’s Oracle protocol, the exchange will go back online with limited functionality.
bZx Hack A Win For Chainlink
As we noted, when the hack was officially confirmed, Chainlink’s LINK token was soaring. Chainlink CEO as we noted was quick to point out that blockchain products should not use a single Oracle as was the case with bZx.
With the hack, it was confirmed that bZx was using only one oracle for pricing purposes. The hackers were able to manipulate the exchange’s DeFi protocols simultaneously gaining access to $350K worth of ETH. This hack, the first hack, allowed the hackers to make away with ETH worth around $350K.
The Second Attack
This remains unclear. Cointelegraph has reported that on the 18th, bZx CVO Kyle Kistner has told the official bZx Telegram group that there has been a second attack. The latest one has seen the hackers make away with nearly $636,000 worth of ETH.
This second attack seems to have forced the exchange to make the decision to add the Chainlink Oracle protocol. The Chainlink protocol will add new security layers.
Chainlink is hugely benefiting as it grows its partnership and comes out as a preferred oracle protocol for securing data. Its LINK token which has been bullish in 2020 will be pumping to this and reaching new highs.
bZx Will Be Back
When the first attack was confirmed, the exchange announced it would compensate its users. The value of the loss is estimated to be 2% of its total assets. The exchange is therefore certainly set to bounce back from this though they will need to restore client trust.
UPDATE: We are meeting with Chainlink today and expediting the addition of the oracle to our model. After this is added, we will go online with extremely limited functionality: lending, unlending, and closing positions/loans. New positions and new loans will not be available.
— bZx (@bzxHQ) February 18, 2020
The exchange notes that when back online, it will carry out limited functionalities. This will enable their developers to first test their new protocols and ensure investor assets are safe.
The bZx hack has been confirmation that hackers and scammers are taking note of the crypto market. Just like in 2017 and 2018, they will be making a full comeback. Hopefully, investors and exchanges have learned from previous mistakes.