Onyx Protocol, a decentralized finance (defi) platform, has recently experienced a security breach resulting in a loss of $2.1 million. This attack involved a "precision loss" vulnerability and a flash loan, which allowed the attackers to drain a significant amount of ETH and ERC20 tokens from the platform. Despite this breach, the platform's native currency, onyxcoin (XCN), has only seen a slight decline of 0.8% since the event. In this article, we will delve into the details of the Onyx Protocol hack and discuss its implications for the defi ecosystem.
The Onyx Protocol Hack
On November 1, 2023, the blockchain analysis and security team at Peckshield discovered a suspicious transaction involving Onyx Protocol, a peer-to-peer lending and cross-token liquidity market. The attackers exploited a "precision loss" bug and utilized a flash loan to successfully drain a substantial amount of ETH and ERC20 tokens from the platform. This breach resulted in a loss of $2.1 million for Onyx Protocol.
Impact on Onyx Protocol
Following the security breach, Onyx Protocol's total value locked (TVL) in the decentralized finance project plummeted from $2.88 million to $557,253. This significant drop indicates the severity of the attack and highlights the vulnerability of defi platforms to such breaches. However, despite the breach, the platform's native currency, onyxcoin (XCN), experienced a modest decline of only 0.8% in value, showcasing its resilience in the face of adversity.
Funds Redirected to Tornado Cash
In the aftermath of the hack, a portion of the stolen crypto assets from Onyx Protocol was quickly transferred to the ether mixing service Tornado Cash. This service allows users to mix their ethereum (ETH) holdings to enhance privacy and anonymity. The diversion of funds to Tornado Cash complicates the recovery process and makes it more challenging to trace the stolen assets.
Implications for the Defi Ecosystem
The Onyx Protocol hack serves as a stark reminder of the risks associated with decentralized finance platforms. Despite the increasing popularity and potential of defi, security vulnerabilities remain a significant concern. This breach highlights the need for robust security measures and continuous audits to protect user funds and maintain trust in the defi ecosystem.
The Onyx Protocol hack, resulting in a loss of $2.1 million, has exposed the vulnerabilities present in decentralized finance platforms. The utilization of a "precision loss" vulnerability and a flash loan allowed the attackers to drain a substantial amount of ETH and ERC20 tokens from the platform. While the breach had a significant impact on the platform's total value locked, the native currency, onyxcoin (XCN), only experienced a slight decline. Moving forward, it is crucial for defi platforms to prioritize security and implement stringent measures to safeguard user funds and maintain the integrity of the ecosystem.
What are your thoughts on the Onyx Protocol hack? Share your opinions and insights in the comments section below.
Frequently Asked Questions
How Much of your IRA Should Be Made up of Precious Metals
Investing in precious metals such as gold and silver is the best way to protect yourself from inflation. It's not just a way to save money for retirement.
Although silver and gold prices have increased in recent years, they can still be considered safe investments as they don't fluctuate nearly as much as stocks. These materials are in constant demand.
Prices for silver and gold are predictable and usually stable. They are more stable when the economy is growing than they are during recessions. This makes them great money-savers and long-term investments.
You should invest 10 percent of your total portfolio into precious metals. If you want to diversify even further your portfolio, that percentage could rise.
How to Open a Precious Metal IRA
It is best to open an IRA with precious metals through a Roth Individual Retirement Account.
This type of account is superior to other types of IRAs in that you don't pay any taxes on the interest earned from your investments, until you withdraw them.
This makes it very attractive to people who want to save money but also need a tax break.
There are many other options than investing in gold and silver. You can put your money in almost any item that meets the IRS guidelines.
While most people associate precious metals with silver and gold, there are many types of precious metals.
Some examples include palladium, platinum, rhodium, osmium, iridium, and ruthenium.
There are several ways you can invest in precious metals. These include purchasing bullion coins and bars, as well as shares in mining companies.
Bullion Coins, Bars
One of the best ways to invest in precious metals is by buying bullion bars and coins. Bullion is a general term that refers to physical ounces of gold and silver.
You get actual bullion bars and coins when you purchase bullion coins.
You might not notice any changes in your pocket when you buy bullion coins or bars from a store but you will see some benefits over the long-term.
This is an example of a tangible piece in history. Every coin and every bar has a unique story.
If you compare the nominal value to face value, you will often find that it is worth much less than its nominal. For example, the American Eagle Silver Coin was only $1.00 per ounce when it was introduced in 1986. However, today, an American Eagle Silver Coin is more than $40.00 per Ounce.
Many investors prefer bullion coins and bullion bar to futures contracts because of the dramatic increase in bullion's value.
Investing in shares of mining companies is another great option for those looking to buy precious metals. You're investing in the company’s ability to produce precious metals.
You will then be entitled to dividends which are based upon the company’s profit. These dividends can then be used to pay out shareholders.
In addition, you will benefit from the growth potential of the company. As demand for the product increases, so should the share prices of your company.
This is why it's important that you diversify your portfolio. Stocks can fluctuate in prices so it's important to diversify. This is how you spread your risk across different companies.
It is important to keep in mind that mining companies can lose their financial investments just as stock markets investors.
If gold prices drop significantly, your share of ownership could be worthless.
The Bottom Line
Precious metals such silver and gold provide an economic refuge from uncertainty.
Silver and gold, however, can experience wild swings in their prices. A precious metals IRA account is a good option for long-term investment.
By doing this, you can reap the tax benefits and still have physical assets.
Are gold IRAs a good investment?
An investment in gold can be made by buying shares of companies that mine it. You should buy shares in these companies to make money from investing in gold and other precious metals such as silver.
However, there are two drawbacks to owning shares directly:
First, you can lose money by holding onto your stock for too long. Stocks that fall are less than their underlying asset (like silver) and can end up losing more money. This means that you might end up losing more money than you make.
You may also miss potential profits if the market recovers before you sell. So you may need to be patient and let the market recover before you profit from your gold holdings.
You can still enjoy the benefits of physical gold if your investments are separate from your finances. An IRA with gold can diversify and protect your portfolio against inflation.
You can find out more information about gold investing on our website.
What kind of IRA can you use to hold precious metals in?
Most financial institutions and employers offer an Individual Retirement Account (IRA). This is an investment vehicle that most people can use. An IRA allows you to contribute money that is tax-deferred until it is withdrawn.
An IRA lets you save taxes and pay them off later. This means more money deposited into your retirement plan today versus having to pay taxes on that money tomorrow.
An IRA is a great investment because your earnings and contributions are tax-free. You can withdraw funds at any time. Early withdrawals are subject to penalties.
After 50 you can still make contributions to your IRA. There is no penalty. You'll owe income tax and a 10% federal penalty if you withdraw from your IRA in retirement.
Refunds received before the age of 591/2 are subject to a penalty of 5% from the IRS. For withdrawals made between the age of 59 1/2 & 70 1/2, a 3.4% IRS penalty will apply.
There is a 6.2% penalty for withdrawals over $10,000 per calendar year.
- SEP-IRA”Simplified employee pension” For self-employed people like independent contractors, freelancers, and small-business ownersSame tax rules as traditional IRASEP IRA contributions in 2022 are limited to 25% of compensation or $66,000, whichever is less4. (sltrib.com)
- Depending on your financial situation, most experts recommend you invest no more than 5% to 10% of your retirement funds in precious metals. (forbes.com)
- If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal so that you would owe income tax on the item's value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
- The IRS also allows American Eagle coins, even though they do not meet gold's 99.5% purity standard. (forbes.com)
How to buy gold for your Gold IRA
Precious metal is used to describe precious metals such as gold, silver (excluding helium), palladium, palladium or osmium), ruthenium, rose, rhenium, ruthenium and others. It's any element naturally occurring with atomic numbers 79 to 110 (excluding helium), that is valued for its rarity or beauty. Gold and silver are the most popular precious metals. Precious Metals are often used for money, jewelry and industrial goods.
Gold prices fluctuate daily because of supply and demande. As investors seek safety from unstable economies, there has been an increase in demand for precious metals in the last decade. This has resulted in a substantial rise in the prices. However, some are hesitant to invest in precious metals because of the rising costs of production.
Gold is a reliable investment due to its rarity and durability. Unlike many investments, gold never loses value. Gold can be bought and sold without tax. There are two ways to invest in gold. You have two options: you can buy gold bars and coins, or you can invest in futures contracts.
In-dispute liquidity can be achieved with physical gold bars or coins. They are easy for you to store and trade. But they don't offer much protection against inflation. For protection against rising prices, gold bullion is a good option. Bullion can be defined as physical gold. It comes in different sizes. Bullion comes in a variety of sizes, including kilo bars and one-ounce pieces. Bullion is normally stored in vaults that are fire- and theft-resistant.
You might prefer to own shares of gold than actual gold. If so, then you should look into buying futures gold. Futures give you the opportunity to speculate about what might happen to gold's value. You can expose yourself to the price of gold by buying gold futures without having to own the physical commodity.
If I wanted to speculate about whether gold's price would rise or fall, I could buy a gold contract. My position will change when the contract expires. It can be either “longer” or “shorter.” A long contract is one in which I believe that the price of gold will rise. I'm willing now to pay someone else money, but I promise I'll get more money at the end. A shorter contract would mean that I believe the gold price will fall. I'm willing and able to take the money now, in return for the promise that I will make less money later.
I will receive the amount of gold in the contract, plus interest, when the contract ends. By doing this, I can get exposure to the market price for gold without actually owning it.
Precious metals can be a great investment because they are very hard to counterfeit. While paper currencies can be easily counterfeited by printing new bills, precious metals cannot. Because of this, precious metals have traditionally held their value well over time.
By: Jamie Redman
Title: Onyx Protocol Suffers $2.1M Loss in Defi Breach, Funds Redirected to Tornado Cash
Sourced From: news.bitcoin.com/onyx-protocol-suffers-2-1m-loss-in-defi-breach-fraction-of-funds-redirected-to-tornado-cash/
Published Date: Wed, 01 Nov 2023 14:00:25 +0000