How much was lost in the Palmswap hack?

The Palmswap hack resulted in $900K in losses on July 24, 2023.

What attack technique was used in the Palmswap exploit?

The Palmswap exploit utilized Inflationary Accounting Manipulation. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

Palmswap Hack

TOTAL LOST $900K

Low Jul 24, 2023 Inflationary Accounting Manipulation bsc

Affected Chain bsc Incident surface

Recovered - No recovery reported

All-Time Rank #858 By amount stolen

Auditors 1 Prior security audit

Incident Overview

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Incident Report

Protocol / Project Palmswap

Date of Incident July 24, 2023

Affected Chain(s) bsc

Attack Technique Inflationary Accounting Manipulation

Classification Protocol Logic

Primary Source View Post-Mortem

Protocol Information

Protocol Type Derivatives

Smart Contract Language Solidity

Official Website www.gameswap.org/

Protocol Twitter/X @Palmswaporg

Market Context at Time of Hack

Token Categories

Collectibles & NFTs Decentralized Exchange (DEX) Token DeFi Gaming Ethereum Ecosystem Yield Farming Avalanche Ecosystem

Protocol Links

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.

Technical Knowledge Deep understanding of inflationary accounting manipulation and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with bsc smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in Palmswap's contract logic - root cause: protocol logic

Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block

Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Inflationary Accounting Manipulation audit checklist and test coverage

Audited by Audit Report 1 — still lost $900K. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Palmswap, these are the critical security checks that could have prevented this incident (July 2023).

Verify all logic paths related to Inflationary Accounting Manipulation are guarded by proper access controls and input validation
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.

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Security Audit History

Audit Report 1 Report

Proof-of-Concept Exploits

1 PoC available

poc-exploits - palmswap

$ Palmswap Business Logic Flaw

On-Chain Evidence & References

Twitter/X Alert https://twitter.com/BlockSecTeam/status/1683680026766737408

Sources & References

01
Source 1 https://twitter.com/peckshield/status/1683609019334950912

Threat Assessment

Severity Level

LOW

Attack Vector Inflationary Accounting Manipulation
Root Cause Protocol Logic
Year 2023

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