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Lido assures LDO, stETH tokens remain safe despite flaw in token contract

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Ethereum staking protocol Lido Finance has assured each Lido DAO (LDO) and staked-Ether (stETH) tokens stay protected regardless of hackers allegedly exploiting a recognized safety flaw in LDO’s token contract.

Lido didn’t confirm any exploits, however acknowledged the safety flaw was recognized and reassured LDO and stETH funds stay protected in response to a Sept. 10 put up by blockchain safety agency SlowMist.

SlowMist mentioned LDO’s flawed token contract permits dangerous actors to facilitate “pretend deposit” assaults on exchanges as a result of LDO’s token contract permits customers to execute transactions even the place they don’t have ample funds. This code deviates from the Ethereum Request for Remark 20 (ERC-20) token commonplace, in keeping with SlowMist.

Nevertheless, Lido Finance argued the flaw is constructed into all ERC-20 tokens — not simply Lido’s LDO token:

SlowMist mentioned the “pretend deposit” assaults got here from LDO’s token contract executing transfers the place the worth is bigger than what the consumer really owns, triggering a false return versus reverting the transaction. Whereas the agency mentioned Lido’s token contract has just lately been exploited by way of this assault, no on-chain proof was offered.

Cointelegraph reached out to SlowMist for remark however didn’t obtain an instantaneous response.

In the meantime, on-chain analyst “Hercules” explained on Sept. 10 that the safety flaw might not be picked up by cryptocurrency exchanges.

SlowMist recommends LDO holders to additionally test the return values of the token contract transfers along with the success or failure of a transaction.

The blockchain safety agency concluded that token contract implementations and behaviors fluctuate by undertaking and to conduct complete testing earlier than integrating any new tokens.

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Nevertheless, Lido highlighted within the official Ethereum Enchancment Proposal doc — co-authored by Vitalik Buterin in November 2015 — that each the “switch” and “transferFrom” features should return the switch standing and are solely beneficial to revert a transaction in distinctive circumstances.

To resolve the safety flaw, Lido confirmed the LDO token integration guides will quickly be up to date.

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