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Cellframe Network was attacked by a Hacker, resulting in a $760,000 loss due to a Liquidity migration vulnerability.
Cellframe Network Encountered Attack: Liquidity Migration Vulnerability Leads to Losses
On June 1, 2023, Cellframe Network suffered a hacker attack on the Binance Smart Chain, resulting in a loss of approximately $76,112. This attack exposed a token quantity calculation issue in the project's Liquidity migration process.
Attack Process Analysis
Hackers carried out a carefully planned attack using flash loans and Liquidity manipulation:
First, obtain 1000 BNB and 500,000 New Cell tokens through a flash loan.
Exchange all New Cell tokens for BNB, causing the amount of BNB in the liquidity pool to approach zero.
Exchange 900 BNB for Old Cell tokens.
Before the attack, the hacker added liquidity of Old Cell and BNB to obtain Old lp.
Call the liquidity migration function. At this point, the new pool has almost no BNB, and the old pool has almost no Old Cell tokens.
During the migration process, due to the lack of Old Cell tokens in the old pool, the BNB obtained from removing liquidity increases, while the Old Cell decreases.
Users only need a small amount of BNB and New Cell to obtain Liquidity, and the excess BNB and Old Cell will be returned to the users.
The attacker removes the liquidity from the new pool and exchanges the returned Old Cell for BNB.
At this time, the Old Cell in the old pool is sufficient but lacks BNB, and the attacker will re-exchange the Old Cell for BNB to make a profit.
Repeat the migration operation to further seize profits.
Sources of Attacks and Prevention Suggestions
The root cause of this attack lies in the calculation issues during the liquidity migration process. To prevent similar attacks, the project team should:
When migrating liquidity, consider the changes in the quantities of the two tokens in both the old and new pools as well as the current prices.
Avoid directly using the quantities of the two currencies in the trading pair for calculations, as this can be easily manipulated.
Conduct a comprehensive security audit before the code goes live, with particular attention to key functions involving fund flows.
Establish a real-time monitoring system to promptly detect abnormal trading patterns.
Consider introducing price oracles and other external data sources to obtain more reliable price information.
This incident once again emphasizes the importance of security in the design and implementation of complex financial operations in DeFi projects. As the cryptocurrency ecosystem continues to evolve, project teams need to be more vigilant and adopt stricter security measures to protect user assets.