SlowMist: The 42DAO attack was caused by the attacker arbitraging by liquidating the BTCB vault at an abnormally low price due to an oracle malfunction

Foresight News reports that SlowMist has released an analysis indicating that the reason for the attack on 42DAO was that the attacker exploited an abnormally low BTCB price presented by the Median Oracle. The attack was carried out through the "poke" function in the Spotter module and the "bark" function in the Dog module. The Spotter module lacks price deviation checks, maximum drawdown limits, and a minimum price protection mechanism, which allowed the abnormal low price to be entered directly into the Vat account. Subsequently, the Dog module, with no set liquidation delay or oracle price verification, used this updated spot price to immediately liquidate multiple BTCB vaults, enabling the attacker to execute arbitrage.

As previously reported by Foresight News, the native algorithmic stablecoin Balance Coin (BLC), incubated and implemented by 42DAO, suffered a hacker attack resulting in a 99% price crash of BLC and a loss of approximately 915 thousand US dollars for 42DAO.