In Brief
In response to a recent security incident, Velocore has temporarily turned off most of its features, only keeping the withdrawal option active for affected liquidity providers.
This decentralized exchange (DEX) operates on Ethereum’s Layer 2 networks. ZKsync and Linea , Velocore In light of a recent security exploit that exposed vulnerabilities, Velocore announced it has restricted most operations, retaining only the withdrawal option.
During the security incident, it was primarily the volatile pools that faced exploitation, while other pools remained intact. Additionally, imbalances in stable pools and depegged assets led to extra losses for liquidity providers since they couldn’t resolve these through arbitrage methods. On another front, Velocore had the option to zero out the swap fee on Linea but couldn’t implement more extensive changes, leading to this damage control to protect user withdrawals.
Moreover, while reassessing their contracts, Velocore discovered another potential vulnerability that posed a risk of asset theft. In response, they executed a white-hat operation to promptly tackle the threat, securing assets within a designated Safe vault.
Velocore has made it clear that affected liquidity providers can now claim their assets based on the LP snapshot taken at a specific block on both ZKsync and Linea.
Additionally, the Telos blockchain The security measures were effectively applied without the introduction of a timelock, and Velocore plans to return any stolen assets directly to their rightful owners on a one-to-one basis, which will be separate from the overall compensation for liquidity providers. Currently, the team is taking snapshots for Telos and working on updates to the claims functionality.
Importantly, community members will later decide on how to compensate victims of the prior exploit affecting liquidity providers through a vote, determining whether to reboot or liquidate. Any remaining resources will be pooled into a single treasury for collective decision-making.
Velocore has suffered a $6.8 million loss in Ethereum due to a security breach that compromised several pools.
Velocore Positioned as the pioneering veDEX operating across multiple blockchains, its aim is to create a trading framework that is affordable with low slippage. This helps alleviate the pressure on protocols to inflate token rewards, thus nurturing growth in the decentralized finance ecosystem. Velodrome On June 2nd, Velocore experienced a security vulnerability that resulted in the loss of about $6.8 million worth of ETH, linked to weaknesses in the CPMM pool contract styled after Balancer. The contracts affected included all volatile pools (CPMM) on both Linea and ZKsync Velocore. Although similar vulnerabilities were detected in Telos Velocore, preventative actions were successfully taken before any exploitation could transpire.
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