The developers of the Arbitrum-based Jimbos Protocol are trying to decide what would be the best way forward for the version 2 project, which faced an attack of nearly $7 million over the weekend. Jimbos officials announced that they are working with security researchers who previously managed to recover funds in Euler Finance’s $200 million attack. Authorities added that if the attacker does not return the money by 16:00 (UTC) on Monday, they will contact law enforcement.
After the protocol lost 4,090 Ether (ETH) the other day, users blamed security analysts for the lack of slippage control in the main contract. This shortfall led the attackers to take out a $5.9 million flash loan and manipulate the JIMBO token prices.
The flash credit method is one of the most popular ways attackers use to exploit decentralized finance (DeFi) systems. Loans in decentralized financial systems allow investors to receive unsecured funds from lenders via smart contracts instead of third parties. These do not require any collateral because the contract recognizes that the transaction is complete only if the borrower repays the lender. That is, a borrower who defaults on a flash loan causes the smart contract to cancel the transaction, and the money is returned to the lender. During all these developments, the protocol’s token JIMBO is trading at 18 cents at the time of writing, and the developers continue to implement their protective plans.