Following a recent oracle issue, asset issuance platform Synthetix will reverse the misplaced 37 million synthetic ether (sETH) in exchange for a bug bounty, Synthetix founder Kain Warwick stated on June 25.
According to the statement, Synthetix has now resumed trading and transfers after the platform yesterday suffered an oracle error that led to several trades with profits of 1000x, resulting in more than $1 billion in profits in under an hour.
Warwick, who is also CEO of Australia-based payment operator blueshyft, has described the details of the accident, noting that the error, which led one of APIs on the platform to report a 1000x higher price for the actual rate for Korean Won (KRW). According to Warwick, Synthetix’s private price oracle has misreported the price of KRW since the oracle took an average of the only two remaining prices due to an “earlier unrelated outage which had not been caught by our exception reporting.”
Subsequently, one of multiple trading bots on Synthetix exchange managed to detect the price error and exploit it to gain massive profits based on the incorrectly reported price of KRW, Warwick wrote.
The exchange subsequently stopped oracle service, halting all transfers and trading within the system at that time, the post reads. Synthetix further reached out with the owner of the bot, who agreed to reverse the trades in exchange for a bug bounty of unspecified amount, Warwick reported.
Synthetix founder added that the platform has included additional redundancy to its price feeds and a more efficient exception tool to prevent errors of this type.
A blockchain oracle is a system providing the necessary external data in order to trigger the execution of a smart contract when the terms of the contract are met. As such, Synthetix.Exchange implements a private oracle that pulls feeds from multiple credible financial market resources, as the company said on its website, adding that they are currently seeking options for decentralized oracles.
Earlier this year, major American crypto exchange and wallet service Coinbase gave a $30,000 reward for reporting a critical bug on its system.
Article First Published here