Incident Overview
On January 3, 2023, a flash loan attack occurred on the GDS chain, resulting in a total loss of $187,000 and an 84% decline in the price of GDS currency.
The attacker, identified by their address as 0xcf2362, used a flash loan to borrow 2.38 million $USDT and traded 0.6 million $USDT for 3.4 million $GDS tokens using a pancake swap. The attacker then obtained a large amount of LP tokens using the remaining $1.7 million in USDT from the liquidity pool. There was a flaw in the "_lpRewardAmount" calculation function that the attacker misused to collect the profits from the $GDS token contract and then transfer the LP tokens to another contract 70 times to earn higher rewards until the flash loan was repaid.
Attacker’s address: https://bscscan.com/address/0xcf2362b4…de36a7
Attacker’s transaction: https://bscscan.com/tx/0x2bb704e0…bf6694
Attacker’s remaining balance: https://bscscan.com/tokenholdings?a=0xcf2362b4…de36a7
GDS Pool closed after the attack: https://bscscan.com/tx/0x06d23624…0f43dc
10.3M $GDS tokens reward: 0x43b487c
Incident Report
Protocol Information
Market Context at Time of Hack
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to GDS Chain, these are the critical security checks that could have prevented this incident (January 2023).
- Verify all logic paths related to Flash Loan Attack are guarded by proper access controls and input validation - see the Flash Loans Attacks attack class for patterns
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
Free TrialSecurity Audit History
- Audit Report 1 Report
Related Attack Classes
The technique used in this hack maps to these vulnerability classes in our security curriculum:
Sources & References
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