Posted 12/9/2023, 5:10:09 PM
Coding Bug Allows Arbitrage Bot to Drain $699K from Cryptocurrency Liquidity Pool
- Bug in Immediate-or-Cancel order led arbitrage bot to drain $699K from Lifinity's LFNTY-USDC pool
- Bot exploited failed trade that wrongly returned 0 amount instead of an error
- This allowed bot to buy at extremely low prices, draining the funds
- Lifinity uses a Constant Product Market Maker model, but bug broke the algorithm
- Lifinity working to recover funds, add liquidity, and update code to prevent reoccurrence