On Wednesday, May 8, the Cosmos ecosystem Osmosis blockchain platform suspended block production due to a security flaw in the Osmosis DEX implementation that could lead to exhaustion of liquidity pools.

“Liquidity pools are not ‘fully drained’. The developers are fixing the bug, assessing the damage (probably around $5M) and working on restoration [сети]. The project team said that more detailed information will be provided in the near future.

At the time of writing, the platform has not traded for more than 4 hours. Network block height #4 stopped at 713 064.

Reddit users were the first to notice the exploit. One of them noted that the vulnerability allows you to deposit liquidity into the pool and receive 50% more deposits when removed.

One of the addresses repeatedly exploited the vulnerability for more than 30 minutes. As a result, it has withdrawn more than 75,000 ATOMs (~$659,000) from ecosystem contributor Cosmos.

Verifiers started reporting issues after the Osmosis v9 update released on June 7. The update focuses on the implementation of a module that allows blockchain platform projects to use the CosmWasm service for issuing tokens.

Recall that in January 2022, the price of the native Osmosis coin peaked above $10.