DeFi platform ParaSwap swiftly identified and responded to a serious security issue in its Augustus v6 contract, launched on March 18th, aimed at optimizing swap efficiency and decreasing transaction costs. The team’s prompt action prevented substantial financial damage after discovering the risk on March 20th.
Decisive Action Thwarts Potential Heist
Following the discovery, ParaSwap deactivated its v6 API to arrest any fund exploitation via a controlled white hat strategy. The platform also recommended that its users revoke permissions for the implicated contract as a safety measure. Despite these precautions, a hacker succeeded in siphoning around $24,000 from four wallets.
The security breach impacted a total of 386 user addresses. ParaSwap has urged users to report any unnoticed losses from the incident, promising further details on reimbursement strategies soon.
Continued Risks and Cautionary Measures
ParaSwap has since disabled the compromised v6 contract in its updated interface, reverting to the older v5 version, and is working on solutions for affected users. Meanwhile, the incident has prompted discussions about the role of AI in software security, as artificial intelligence, including advanced tools like ChatGPT-4, lack the capabilities to entirely replace human experts and traditional audit tools in detecting complex vulnerabilities.
Users continue to be at risk if they do not revoke their approvals to the faulty contract. Security experts and industry observers are emphasizing the necessity of professional auditing and thorough security checks for smart contracts, as AI tools are not yet sufficient to guarantee security on their own.
