Osmosis is a DEX operating on Cosmos blockchain that recently reported issues with operations. The network validators resorted to halting the operations of the blockchain network to prevent any further damage. The exploit that caused the issue has made the block production feature offline for a whole which can result in the drainage of liquidity pools at Osmosis.
At present, the developers at Osmosis have posted on Twitter some updates regarding the issue. The latest tweet by Osmosis suggests that the liquidity pools still have some gas left. Furthermore, the developers on the network are working to ensure that the bug is fixed within a suitable time to minimize the impact of the damages.
At present, the Cosmos network is out of commission. The initial loss estimate issued by the developers is around $5 million. While the network engineers are working on recovering the network and fixing the bug, the stakeholders are advised to have some patience and wait for further updates on the topic. A pseudonymous Twitter account called @TheJunonaut posted the first updates on the matter.
The tweet reported that the exploit that is currently inflicting the Osmosis DEX could drain all its liquidity pools. He further updated that the bug was discovered by the Reddit users associated with OsmosisLabs and CosmosNetwork pages. The Twitter user also updated the users that network validators took an urgent step to halt the operations of the network to avoid further damages.
The team working on troubleshooting at Osmosis DEX recently issued a statement where they interjected that the liquidity pools have been isolated from the exploit parameter and salvaged. It has been 4 hours since the validators have taken the blockchain out of commission. The on-chain analysis reveals that the network went offline at 4 713 064 block height.
The Network was Open to Exploits for 30 Minutes
The incident was first noticed by a Reddit user who noticed that anyone who was allowed to add liquidity to pools at Osmosis was qualifying for a 50% extra return upon removing it.
When the issue was first reported, most investors did not believe it and went on to try it out themselves. Consequently, the network was open to exploits for 30 minutes straight, which resulted in the withdrawal of 75K ATOM tokens worth $659K from the Cosmos network.