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Blueberry successfully suspended its lending operations shortly after experiencing an exploit that resulted in the loss of over $1.3 million worth of Ether from the DeFi protocol.
In an X post dated February 23, the Blueberry Protocol Foundation disclosed that it was dealing with an “ongoing exploit” and advised users to withdraw their assets from Blueberry lending markets while the foundation worked on ceasing the protocol’s operations.
Additional information regarding the exploit:
All drained assets were front-run by @coffeebabe_eth (not a real Twitter account, not present on social media) and are now secured in the Blueberry multisig, excluding the validator payment.
The team is in communication with security and communications experts and will attempt…
— Blueberry Protocol Foundation
(@blueberryFDN) February 23, 2024
(@blueberryFDN) February 23, 2024Blueberry Experiences Attack
Shortly after Blueberry’s initial announcement, users reported difficulties with withdrawals, prompting the protocol to acknowledge that its front end was also non-functional.
“The front end is also down, so if you can interact directly with the contracts to withdraw, please do,” Blueberry stated in a subsequent X post.
The website and app briefly went offline, with both indicating that “a client-side exception has occurred.”
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About 30 minutes later, Blueberry confirmed that it had effectively suspended the protocol. Its website has been restored and is now fully operational.
An additional update from the protocol indicated that all drained assets had been front-run by white hat hacker c0ffeebabe.eth and are now securely held in the Blueberry multisig. Initially, 457 ETH (~$1.34 million) was drained, but 366 ETH (~$1.07 million) was recovered by c0ffeebabe.eth and returned to the multisig wallet, as noted by the team.
“Deposited funds are currently secure,” Blueberry stated. “Only three markets were impacted, and the vast majority has already been returned. The total validator payment (loss) is 91 ETH. We are reaching out and aim for a complete repayment to users as our objective. The protocol is paused.”
The Blueberry Protocol
The Blueberry Protocol is a decentralized lending market that enables lending and leveraged borrowing with the potential to reach up to 20 times the value of the collateral.
As per DefiLlama, the protocol had a total value locked (TVL) of $4.5 million prior to the incident. Its TVL has now decreased to $3.11 million following the exploit attempt.
On February 22, Blueberry issued a “security overview,” stating that its development and risk mitigation strategy prioritizes security from the beginning to avert any internal risks stemming from protocol activities.
The protocol also mentioned that it underwent audits by Hacken and Sherlock, who performed two independent token security assessments. However, the tweet promoting the “security review” is no longer visible on Blueberry’s X feed.
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