What happened
On April 4, 2023, an attacker extracted about $1 million from Sentiment on Arbitrum by exploiting a read-only reentrancy in the Balancer LP-token pricing integration. Flash-loaned capital was used to create a transiently favorable collateral valuation, borrow against that valuation, and leave the protocol with bad debt. The attacker later returned about 95% under a bounty-style arrangement.
How it happened
- The attacker used flash-loaned capital to establish a Sentiment position backed by Balancer LP collateral.
- During a Balancer pool operation, the attacker re-entered Sentiment's oracle read path while the pool's observable state was inconsistent with its steady-state price.
- Sentiment valued the collateral favorably, allowing the attacker to borrow and withdraw assets.
- Sentiment paused the affected markets; the attacker subsequently returned roughly 95% of the extraction.
Protocol details
Security review history
- Sherlock View report
Funds Recovery
Recovered
$863K
Net Loss
$137,000
Post-Incident Timeline
-
2023-04-05
The Sentiment Team sent on-chain message, declaring 95,000 $USD bug bounty and 'asking' to return the rest of the funds. The attacker followed the statement, and returned roughly 90% of the stolen amount as 465.75 $ETH. The rest of the funds were transferred through TornadoCash. Returning transactions: Tx 1 0xe1d2…7580 Tx 2 0xa9cc…b6ca Tx 3 0xc84e…3e56 On-chain message: Tx 4 0x464c…32a1
Evidence
Proof of concept
1 availableSources
- report Twitter/X Alert twitter.com
- report Twitter/X Alert twitter.com
- report Post-mortem medium.com
- report @spreekaway incident report twitter.com
- report @spreekaway incident report twitter.com
- report @0xmikko_eth incident report twitter.com
- report @sentimentxyz incident report twitter.com
- analysis DeFiLlama defillama.com
- analysis Sentiment Protocol read-only reentrancy via Balancer LP integration onchainattack.org
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