EraLend, a decentralized lending protocol working on the zkSync Layer 2, has fallen sufferer to an exploit leading to a lack of $3.4 million. The assault was confirmed by safety analysts at BlockSec, who’ve been helping the protocol in addressing the difficulty.

Following the assault, EraLend issued a statement acknowledging the safety incident and assuring its customers that the menace had been contained. The protocol has suspended all borrowing operations and suggested customers in opposition to depositing USDC till additional discover.

Re-Entrancy Assault Strikes EraLend

In response to BlockSec, the assault was a read-only re-entrancy assault. This assault entails a malicious actor repeatedly getting into and exiting a contract operate to govern the contract’s state and withdraw funds.

A reentrancy assault is an exploit that may happen in sensible contracts, that are self-executing pc packages that run on decentralized blockchain networks like Ethereum. 

In a reentrancy assault, a malicious consumer exploits a vulnerability in a sensible contract by repeatedly calling a operate throughout the contract earlier than the earlier operate name has been accomplished, permitting them to govern the contract’s state and probably steal funds.

When a sensible contract operate is named, the contract’s state is up to date earlier than the operate name is accomplished. Suppose the referred to as operate interacts with a second contract earlier than the primary operate name is accomplished. In that case, the second contract can name again into the primary contract’s operate, probably altering the contract’s state a number of occasions earlier than the unique operate name completes. 

This could enable an attacker to govern the contract’s state and steal funds.

To forestall reentrancy assaults, builders can use a method referred to as “checks-effects-interactions.” Because of this a sensible contract ought to at all times verify all of the inputs and situations earlier than executing any state adjustments, after which execute all state adjustments earlier than interacting with every other contracts. 

This ensures the contract’s state is up to date earlier than exterior interactions happen, stopping reentrancy assaults. On this case, the attacker exploited a vulnerability in EraLend’s contract code that repeatedly allowed them to withdraw funds with out the protocol’s information.

EraLend has recognized the basis explanation for the assault and is working with companions and cybersecurity corporations to handle the difficulty. The protocol has assured customers that it’ll take all needed steps to mitigate the assault’s influence and stop comparable incidents from occurring sooner or later.

Whereas there have been no additional updates, it’s clear that EraLend is dedicated to sustaining the best safety requirements and taking proactive measures to safeguard its customers’ funds and information.

Featured picture from Unsplash, chart from TradingView.com