- CoW Swap, a decentralized exchange (DEX), became the latest DeFi protocol to be exploited by a hacker who drained a settlement contract containing its protocol fees and stole over $180,000 worth of crypto.
- The exploit was first spotted by an on-chain sleuth and confirmed by CoW Swap, noting that neither the protocol nor its users suffered any loss.
- The hacker exploited a smart contract in the „solvers competition“ of CoW Swap by using it to transfer funds from the GPv2Settlement contract.
CoW Swap Hacked for Over $180K
Yesterday, a hacker managed to exploit CoW Swap’s decentralized exchange (DEX) and drain a settlement contract containing its protocol fees. The hack was initially discovered by an on-chain sleuth and then confirmed by the CoW Swap team. In total, over $180,000 worth of crypto was stolen. Despite this, neither the protocol nor its users suffered any losses as all damages are covered by the solver’s bond.
The attack leveraged an external solver who entered CoW Swap’s „solver competition“ ten days ago. This allowed them to manipulate the smart contract and trick it into transferring funds from the GPv2Settlement contract. The hacker consolidated their loot into two wallets containing DAI ($123k), BNB ($50k) and ETH ($7.4k). Luckily for those affected, no user funds were stolen due to CoW Swaps never holding user funds in their system.
Upon discovering that their DEX had been hacked, CoW Swap took several steps in order to mitigate further damage: Firstly they suspended deposits until further notice; secondly they stopped trading; thirdly they documented all relevant events leading up to and including the incident; fourthly they implemented additional security measures; finally they notified both law enforcement agencies and other affected parties about what occurred.
Following this attack, CoW Swap has taken steps towards increasing their cybersecurity measures in order to prevent similar incidents from occurring again in future: These include strengthening their solver competition process so that only approved individuals can participate; introducing additional risk management protocols; implementing multi-signature wallet requirements for certain transactions; instituting regular internal audits; conducting regular penetration tests with external experts; regularly updating code libraries used across various platforms; educating employees about best practices concerning data security & privacy policies.