Osmosis, a layer-1 blockchain on the Cosmos network, was halted on Wednesday after a new bug threatened to drain the chain’s liquidity.
Validators stepped in to halt block production after the discovery of a new bug that allows users to get 50% more when withdrawing their deposits from a liquidity pool.
This was exploited by users, and threatened to drain the chain of all its liquidity. But Osmosis was able to halt the chain in time, limiting its losses to around $5 million. ATOM and OSM tokens were withdrawn in the process.
The protocol is the 83rd largest DeFi player by total value locked, at about $212.8 million, according to data from DeFi Llama. Its TVL has fallen by 1.7% in the past 24 hours, likely reflecting the bug.
Osmosis working on recovery
The bug was first pointed out by a Reddit user on Osmosis’ main subreddit. While users initially brushed off the report, they quickly changed their tune after trying it themselves.
