Bedrock Boosts Security After $2M Exploit With Chainlink Integration and Audits

In the wake of a recent $2 million exploit targeting its liquidity pools, Bedrock, the leading liquidity staking platform, has rolled out a whole new slate of security upgrades.

To ensure the protection of its customers, Bedrock, in collaboration with Chainlink, a pioneer decentralized oracle network, has taken steps to put in place proof of reserves and improve transparency across the whole ecosystem.

🚨Multi-asset liquid staking protocol Bedrock has confirmed a security exploit involving uniBTC, resulting in a loss of around $2M. #CryptoNews #Bedrock #SecurityAlert pic.twitter.com/iuF6sDGn0X

— The Coin Republic (@TCR_news_) September 27, 2024

These steps are taken with the aim of rebuilding the trust of its users and preventing future incidents of this nature.

The Exploit: A Breakdown of the Security Incident

On September 27, 2024, Bedrock announced a security threat that paralyzed roughly $2 million in liquidity by majorly affecting its Uniswap pool.

The post-mortem analysis of the situation found that the exploit was based on a defect contained in the uniBTC smart contract, which let malicious actors create 30.8 uniBTC out of thin air and exchange them for Wrapped Bitcoin (WBTC) in Uniswap pools.

The exploit started with a 2K ETH flash loan from Balancer. The attacker deposited 1,999.5 ETH into the oEther contract (oETH market) while depositing 0.5 ETH into another malicious contract (0xAE7d68) created in the same transaction.

This contract was used to mint and redeem… pic.twitter.com/4W608TDTSH

— Hacken🇺🇦 (@hackenclub) September 26, 2024

The drained funds raised the issue of the platform’s security safeguards which were already doled out at that point of time.

Key Details of the Exploit

• The one affected by the hack: This hack was directed at the uniBTC smart contract only and the other ones like uniETH or uniIOTX were safe.
• Number of Hackers: The people related to this hack were exclusively 125 unique ones but Bedrock management companies can see the exploitation through the method of the vulnerability.
• Exploited Amount: The uniBTC token was the exploit attack main target which caused about $2 million worth of liquidity and it was mainly done by converting uniBTC for WBTC.

The manager at Bedrock said that they found the incident quickly and right after they secured the funds and identified the exploiter addresses as soon as they were able to.

The team emphasized that other platform smart contracts were not under attack during that period, so it was concluded that the only party affected by the attack was the uniBTC asset.

 Strengthening Security: Integration with Chainlink and Other Measures

In the aftermath of the exploit, Bedrock has implemented a robust strategy to bolster its security framework.

The platform’s most notable move is its integration with Chainlink’s proof of reserves, which will allow Bedrock to demonstrate that each unit of uniBTC is backed 1:1 with real Bitcoin (BTC).

🔐 @Bedrock_DeFi prioritizes security with @Chainlink Proof of Reserve integration!

👷 #Bedrock integrating Chainlink's industry-standard Proof of Reserve (PoR) to enhance the security of its minting function and fortify its protocol.

🔥 Key benefits:
✨ Enhanced security… pic.twitter.com/aPJiflqWRX

— Arbitrum Universe (@ARB_Universe) September 27, 2024

This transparency mechanism is expected to enhance trust among Bedrock’s user base and provide verifiable evidence of sufficient reserves.

Additional Security Enhancements

1. Smart Contract Audits: Bedrock plans to conduct comprehensive smart contract audits with reputable third-party security firms. These audits will focus on identifying and mitigating any existing vulnerabilities across the platform’s ecosystem.
2. Real-Time Monitoring: The platform will introduce round-the-clock monitoring for all smart contracts, enabling rapid detection and response to suspicious activities.
3. Security Fund and Bug Bounty Program: Bedrock is proposing the establishment of a security fund to compensate for future incidents. Additionally, a bug bounty program will incentivize ethical hackers to identify potential weaknesses before they can be exploited.

These security upgrades underscore Bedrock’s commitment to safeguarding its users’ investments and ensuring the platform’s stability in the future.

Next Steps: Unstacking Functionality and Liquidity Redeploying

As part of its recovery plan, Bedrock has announced the reactivation of unstaking functionality, allowing users to withdraw their staked assets without delay. The platform is also working closely with its partners to redeploy liquidity across decentralized exchanges, aiming to restore the normal functioning of its pools.

The recent partnership with Chainlink and the implementation of proof of reserves are critical steps in Bedrock’s efforts to rebuild trust within its community.

By guaranteeing 1:1 redemption for uniBTC, the platform ensures that each tokenized unit is fully backed by an equivalent amount of BTC, providing a secure environment for users to stake and trade their assets.

In conclusion, Bedrock’s swift response to the hack, combined with proactive security measures and strategic partnerships, demonstrates the platform’s resilience and dedication to creating a safer, more transparent ecosystem for its users.