Cronos halted its entire blockchain on Sunday after an attacker exploited Tectonic, its largest lending platform, in an incident estimated to have drained roughly $75 million.
How the Tectonic attack unfolded
Cronos was launched by Crypto.com in 2021 and remains closely linked to the exchange, which uses the blockchain to provide lower-cost transactions for its products. CRO is the token Crypto.com promotes as the centre of its ecosystem. The network also hosts a small group of lending and trading applications, led by Tectonic.
Tectonic allows users to deposit cryptocurrency and borrow other assets against it, similar to using a house as collateral for a loan.
One of the tokens accepted as collateral was TONIC, Tectonic’s native token. TONIC had approximately $1.34 million in liquidity and around $11,000 in daily trading volume. Tectonic’s documentation warns that assets with low liquidity can be especially vulnerable to price manipulation.
Blockchain data indicates that this weakness may have enabled the attack. The attacker drove TONIC’s price up by roughly 100 times in about 20 minutes, deposited the suddenly more valuable tokens into Tectonic and borrowed real assets against them.
Source: cryptonews.net
