Origin Dollar loses $7M in latest hack

November 17, 2020
By Hassan Maishera

Stablecoin project Origin Dollar revealed that it has suffered a flash loan attack and lost $7 million in the process

The Origin Protocol team announced yesterday that it has suffered a hack and lost $7 million to  malicious attackers. Origin Dollar (OUSD) tags itself as the first stablecoin that earns a yield while still in your wallet.

The project revealed that it lost $7 million to hackers via a flash loan attack. Following the attack, Origin Dollar paused all deposits and called all team members to figure out how the hackers exploited the vulnerability.

In their Medium post, the company wrote that “At this time, there has been a loss of funds of around $7M, including over $1M of funds deposited by Origin and our founders and employees. We are very incentivised to give 1000% in resolving the issue in whatever way possible”.

Origin Dollar further advised users not to buy OUSD on Uniswap or Sushiswap since the prices shown on the platforms don’t reflect OUSD’s underlying assets. According to earlier reports, the stolen funds included $2.25 million in Dai (DAI) and another million dollars in ether (ETH).

The attacker used a flash loan to alter asset prices, including that of OUSD. In its post, Origin mentioned this transaction as the likely root of the flash attack. Flash loans allow investors to borrow huge sums of money to use as leverage in trading DeFi tokens. The dynamic nature of Ethereum transactions allows investors to take out a loan and return it in the same transaction. As such, no collateral is required.

OUSD down by 46%

OUSD is a stablecoin, which means that it is pegged to the US dollar. However, the attack has seen OUSD lose 46% of its value over the past 24 hours. According to CoinGecko, OUSD is currently trading at $0.5, which is significantly lower than the usual $1.

Origin Dollar assured the crypto community that it is not going away. The team apologised for the incident, stating that “We are not going away. This is not a rug pull or internal scam. Despite this setback, it is very much in our intention to make OUSD a safe, secure and successful product that builds on the broader Origin mission of peer-to-peer commerce.”