It has been a week since Ankr discovered a hack that led to an exorbitant minting of its BNB Liquid Staking Token (aBNBc) and its accelerated exchange for other cryptocurrencies on decentralized exchanges. The hack was performed by an unauthorized third party. The Ankr team quickly patched the vulnerability within hours and raised an initial $15 million recovery fund.
This fund has now been exceeded to pay DeFi BNB liquidity providers, BNB lenders and DeFi protocol users who were affected by the aBNBc attack. A snapshot was taken on December 2, 2022 at 00:43:18 + UTC (block number: 23545403). The compensation plan is expected to be implemented in phases to allow Ankr to monitor conversions and respond quickly to reimburse all valid and impacted aBNBc and aBNBb token holders.
Completion of Ankr recovery plan objectives
After posting the recovery strategy on the Ankr blog and the company’s official social media channels, the Ankr team took a number of steps to initiate the process of paying users for the full extent of the losses they suffered as a direct result have suffered the exploitation. Through the use of smart contracts and liquidity pools, Ankr has been successful up to this point in executing a number of different airdrops of ankrBNB and BNB tokens.
These airdrops were given to wallet addresses that held aBNBc and aBNBb at the time the snapshot was taken. To protect their communities and look after what is in their best interest, the team works closely with a range of different DeFi protocols. Going forward, Ankr will continue to provide new updates as they become available. The following objectives outlined in Ankr’s recovery plan have been achieved at this point:
1. Restabilized HAY price
Ankr completed the acquisition of 6,843,323 HAY on decentralized exchanges on Thursday, December 8, 2022 out of a total of 17,747,582 HAY in accumulated bad debts. HAY’s price successfully stabilized as a result of this move, which resulted in HAY/BUSD hitting $0.98. The process of replacing collateral will continue over the next few weeks until all overdue debt is cleared.
Another 6,000,000 HAY were burned by Ankr on December 13th, marking the first burning of the Helio Bad Debt Burn Address. Immediately after the incident, the Helio team announced they would buy back the excess HAY and ship it to an address where it would be incinerated. Prior to the event, the total value of the Helio Protocol had been determined to be approximately $90 million and Helio had already bought back $3 million worth of bad debts in HAY on the open market.
2. Airdrop from ankrBNB to affected DeFi users
Ankr distributed an airdrop from ankrBNB to wallet addresses that had aBNBc and aBNBb at the time of the snapshot on Friday, December 9, 2022. This has been achieved by using smart contracts for a number of partner DeFi protocols. Ankr was able to successfully complete the airdrop for the protocols listed below:
- elliptical financing
- pancake swap
- Beefy finances
- ApeSwap
- ACryptoS
- wombat
- uterus
- magpie
- quoll
3. BNB airdropped on affected LPs
Ankr issued BNB to wallet addresses on December 12, 2022, provided that those wallet addresses held BNB through either the aBNBc or aBNBb liquidity pools. The following is a list of the liquidity pools compensated by Ankr:
- ACryptoS ASCI farm: 18.57922911707609861 BNB
- ACryptoS LP: 0.312655746961921 BNB
- ApeSwap LP: 192.73227886323606338 BNB
- Ellipsis LP Beefy Vault: 829.820502618376604417 BNB
- Ellipsis LP DotDot Farm: 332.017235831474294796 BNB
- Ellipsis LP farm: 17.327942433773631424 BNB
- Ellipse LP: 9.987203105242974679 BNB
- Kalmy safe: 52.996829992 BNB
- Izumi LP: 509.783825632276009070 BNB
- PancakeSwap LP Beefy Vault: 697.936888689457446913 BNB
- PancakeSwap Farm: 6.225.408642285559266733 BNB
4. Airdrop ankrBNB to missing addresses
By using smart contracts based on the following protocols, Ankr also blew up ankrBNB on missing wallet addresses that had aBNBc and aBNBb in their wallets at the time the snapshot was taken:
5. Unlocked ankrBNB transfers
Ankr will release the portability of newly dropped ankrBNB tokens after trading of aBNBc and aNBb tokens has ceased and token migration to the new ankrBNB has been completed.
6. Wombat stkBNB LP Reimbursement Plan
Ankr and pStake have agreed that the former will drop 2,654,352 ankrBNB and the latter 681,051 stkBNB from the air, which will help partially replace the loss of stkBNB liquidity providers on Wombat. Ankr has reached an agreement with Wombat’s management team on appropriate compensation, although the nature of the mixed liquidity pools on the decentralized exchange makes it difficult to accurately estimate the losses suffered by affected users.
7. 100% coverage for Wombat BNB LPs
Ankr provides full protection for the BNB Wombat LP which is valued at BNB 14,407,155 (before Christmas at the latest).
Ankr’s plans for further investigation
The Ankr team has concluded that additional case-by-case analysis is required to examine possible contingencies that the recovery program did not originally consider. The main consideration will be to protect users who have not engaged in malicious behavior either at the time of the exploit or afterwards.
Arbitrageurs with malicious intent who exploit the aBNBc vulnerability will be banned from the recovery program. The Ankr team is working around the clock to compensate users for any losses they have suffered as a direct result of the exploit, and Ankr will continue to provide updates as long as the airdrops continue.
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