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Sophisticated Trading Bot Exploits Synthetix Oracle, Funds Recovered

Sophisticated Trading Bot Exploits Synthetix Oracle, Funds Recovered
Sophisticated Trading Bot Exploits Synthetix Oracle, Funds Recovered

When Ethereum-based synthetic asset issuance platform Synthetix, which allows users to mint and trade synthetic currencies in a peer-to-peer fashion, lost track of more than 37 million synthetic Ether (sETH) on June 24, the company stopped all trading on its platform. While users only lost trading access for 24 hours, the event led to trades with 1,000x profits equalling $1 billion in less than an hour. The Australian-based company’s synthetic currencies provide access to the value of certain currencies, including and Ether. The platform says it makes it easy for users to hold Bitcoin and Ether, without needing a crypto wallet.

Synthetix crypto-backed synthetic asset tokens are priced against the euro, Japanese yen, Korean won, Australian dollar and gold. Launched in the summer of 2018, Synthetix also has a stablecoin that tracks the United States dollar. Since Synthetix users trade assets that are representations of their underlying assets and track the prices of those assets, if a user trades sUSD into sBTC at $10,000 per BTC and the price goes up to $12,000 per BTC, they can trade that back into $12,000 of sUSD, making a profit of $2,000 sUSD.

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