Market Meditations | July 25, 2022
A governance attack targeted the Audius over the weekend, creating discord across the platform for users and investors alike.
- Audius, the decentralised music streaming platform, saw a proposal requesting the transfer of 18 million AUDIO tokens worth $6.1 million get approved using an exploit Saturday.
- Audius co-founder and CEO Roneil Rumburg provided some clarification around whether or not the community passed a malicious proposal, “This was an exploit – not a proposal proposed or passed through any legitimate means – it just happened to use the governance system as the entry point for the attack.”
- As a result of the attack, Audius halted all smart contracts and AUDIO tokens, though the transfer of tokens has since resumed.
- The attacker was only able to profit just over $1.08 million due to a high level of slippage on the sale order.
Tip: Slippage is difference between the expected price and actual price when an order (in this case, AUDIO tokens) executes. This fluctuation in order price and sale price is due to the volatile nature of cryptocurrency.
The attack has added to an increasing number of exploits and hacks across the DeFi sector in the past few months. DeFi platforms may present especially tempting opportunities to hackers because of large treasuries, open-source code availability, and the opportunity of governance exploits.