Wednesday, June 7, 2023
  • Home
  • Crypto
  • DEFI
  • NFT
  • Press Release
  • Contact Us
No Result
View All Result
No Result
View All Result
Home Price Analysis

DeFi Options Platform Hegic Shuts Down Again

April King by April King
May 21, 2020
in Price Analysis
0
DeFi Options Platform Hegic Shuts Down Again
593
SHARES
3.3k
VIEWS

Just weeks after a typo in the platform’s code base, Hegic has shutdown again after a trader exploited a hole in the system’s design.

The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner

You might also like

Ethermine Accepts Mystery $2.5 Million Dollar Ethereum Transaction Fee

Those Million Dollar Ethereum Transactions? Could Be a Hacked Exchange

Bitcoin May Be Down, but DeFi Is Pumping Like It’s 2017

Share this article

Hegic Options’ revival was short-lived after the protocol succumbed to a design flaw. Andrew Kang revealed that there was a defect in Hegic’s design that allowed older liquidity providers to pocket a profit without fulfilling their obligations. 
DeFi Project Hegic Suffers Poor Game Theory
Hegic Options was forced offline after a trader took advantage of a hole in the network’s design. The platform’s liquidity pool was designed in a way that gave precedence to older liquidity providers.
Liquidity providers that sell options contracts (short the options) would receive their premium and be free to exit the pool after collecting it. The problem was that they weren’t forced to honor the obligation an option seller is supposed to.
Simply put, this means that a trader could receive the benefit of selling an option contract without bearing the liability if they were caught on the wrong side of the trade.
Newer liquidity providers are then forced to bear the entire burden as older providers could collect their options premiums and walk away.

This hole was exploited by a trader who figured out the design flaw. Kang notes the trader first deposited liquidity then bought put options. Then, they withdrew the liquidity and exercised the options.

5) Over 13 transactions & 1.5 days, this LP netted ~$3,340 in profit
Taking into account recycled capital, this was essentially a quick low risk 22% ROI
I’ve detailed the transactions in the table below pic.twitter.com/i0StBz61Wo
— Andrew Kang (@Rewkang) May 21, 2020
This means that the trader earned a premium by selling options, then added fuel to the fire by exercising options they bought, forcing existing liquidity providers to bear a larger loss than they bargained for.

Hegic previously shut down once before after a typo in the codebase froze $30,000 worth of ETH forever.
This time around, Hegic’s code performed as expected, but the protocol suffered from flawed game theory. Hegic’s developer is currently working on fixing the contracts and relaunching the protocol to mainnet.
With two major vulnerabilities in the same month, Hegic has a long road ahead to regain user faith – something bZx has been unable to do over three months after being in a similar situation.

The DeFi news category was brought to you by Ampleforth, our preferred DeFi partner

Share this article

The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.

Previous Post

Bitcoin Mining Marches On – Bitcoin Magazine

Next Post

As Bitcoin Desperately Clings To $9k, These Bullish Fundamentals Can Launch BTC Price To $14,000 ⋆ ZyCrypto

April King

April King

I have been a full-time professional writer for over 10 years, and have written for some of the biggest publications in the world. My work revolves around cryptocurrencies and blockchain technology, and I am widely considered to be one of the leading experts in these fields.I have written two books on the subject matter, and my articles have been featured in major news outlets such as The Wall Street Journal, Forbes, and Huffington Post. In addition to writing, I also give talks and seminars on cryptocurrency investing, and am a regular commentator on CNBC, Bloomberg, and other financial news networks.

Related Posts

Ethermine Accepts Mystery $2.5 Million Dollar Ethereum Transaction Fee
Price Analysis

Ethermine Accepts Mystery $2.5 Million Dollar Ethereum Transaction Fee

by April King
June 15, 2020
Those Million Dollar Ethereum Transactions? Could Be a Hacked Exchange
Price Analysis

Those Million Dollar Ethereum Transactions? Could Be a Hacked Exchange

by April King
June 12, 2020
Bitcoin May Be Down, but DeFi Is Pumping Like It’s 2017
Price Analysis

Bitcoin May Be Down, but DeFi Is Pumping Like It’s 2017

by April King
June 12, 2020
Data Shows 80% of ETH Investments Are in Profit
Price Analysis

Data Shows 80% of ETH Investments Are in Profit

by April King
June 11, 2020
Balancing Black Swan Events With Centralization May Cost Maker Its Community
Price Analysis

Balancing Black Swan Events With Centralization May Cost Maker Its Community

by April King
June 10, 2020
Next Post
As Bitcoin Desperately Clings To $9k, These Bullish Fundamentals Can Launch BTC Price To $14,000

As Bitcoin Desperately Clings To $9k, These Bullish Fundamentals Can Launch BTC Price To $14,000 ⋆ ZyCrypto

  • Why must you pick a white label crypto exchange solution than developing a new one?
  • Bitcoin Product Demos During the Halving – Bitcoin Magazine
  • Whitelabel Cryptocurrency Exchange platform and it’s 4 salient features!
  • Despite Chaos, The Next BTC Price Rally Could Be Spurred By This Little-Known Bitcoin Indicator
    Crypto Pundit reveals what will likely ignite another parabolic Bitcoin Rally ⋆ ZyCrypto
  • Which is Best Crypto Trading Bot Platform?
  • CoinSwap Space first DEX to provide crypto purchases directly onto any non-custodial wallet via Ramp Network

    CoinSwap Space first DEX to provide crypto purchases directly onto any non-custodial wallet via Ramp Network

    3772 shares
    Share 1509 Tweet 943
  • Altseason Pushed Further Back As Top Altcoins Fall Under Bitcoin’s Spell ⋆ ZyCrypto

    3738 shares
    Share 1495 Tweet 935
  • Filecoin and Polygon Deploy Interoperable Bridge To Expedite Web 3 Development

    3545 shares
    Share 1418 Tweet 886
  • The Cost Of Transacting With Bitcoin Has Dropped By Almost 90% Within A Month ⋆ ZyCrypto

    3320 shares
    Share 1328 Tweet 830
  • CoinSwap Opens Up New DeFi Opportunities With Their Certik Approved DEX

    3032 shares
    Share 1213 Tweet 758

About

Cryptoate site is a comprehensive resource for everything related to cryptocurrency and blockchain. We aim to be a one-stop solution for all your crypto and blockchain news and events.

Email: admin@cryptoate.com

Recent Posts

  • Securing Blockchain Technology-DeFi: Challenges & Solutions
  • DEGA Revolutionizes Fundraising with their Gamified Multichain Initial Stakepool Offering
  • Understanding Smart Contracts: The Foundation of DeFi Lending
  • Discover Staking Risks and Considerations
  • Bug Bounty Program Governance and Policy Frameworks

Catagories

  • Mining
  • Crypto
  • Press Release
  • Price Analysis
  • Cryptocurrency
  • Trading
  • Cryptocurrencies
  • Blockchain

Calender

June 2023
M T W T F S S
 1234
567891011
12131415161718
19202122232425
2627282930  
« May    
  • About Us
  • Contact Us

Associated with Blockchain Press Media Network.

No Result
View All Result
  • Home
  • Crypto
  • DEFI
  • NFT
  • Press Release
  • Contact Us

Associated with Blockchain Press Media Network.