Tallinn, Estonia--(Newsfile Corp. - April 10, 2022) - On March 20th, 2022, hackers exploited Umbrella Network's Polar Stream staking contracts on both Ethereum and BNB Chain and drained the LP tokens staked in both of the contracts. Umbrella Network had insurance coverage from decentralized insurance platform Uno Re and their claim has been accepted by the insurer.
Uno Re
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Umbrella Network announced the hack on Twitter the same day the incident happened.
It is reported that the attack was due to an underflow bug in the smart contract code. Hackers managed to withdraw liquidity using the stolen LP tokens from both the UMB-ETH Uniswap and the UMB-BNB Pancakeswap pools.
Subsequently, hackers were then able to sell over 2.2 million UMB tokens to the open market. Umbrella Network also notified users that their stolen UMB, BNB, and ETH will be returned to their wallets within 48 hours.
Following the incident, Umbrella Network's affected staking pool and any pending changes/new additions to Umbrella Network's policy have been temporarily frozen.
Besides the Umbrella Network hack, several staking pools have been compromised by hackers in the past year alone. It is worth mentioning that most of the compromised protocols have had their codes audited sometimes multiple times from a variety of reputed audit firms. However, the fact that even audited protocols get hacked points to the need for DeFi insurance as the stolen tokens in staking pools belong to no other than users.
Thankfully, Umbrella Network has already taken necessary precautions and partnered with a reputed insurance provider, Uno Re.
The details of the claim payout to be made by Uno Re
Uno Re and Umbrella Network's partnership began in August 2021. The partnership was formed to ensure compensation for users' possible losses due to unauthorized, malicious, or criminal acts specifically aiming at exploiting the smart contracts' code vulnerabilities.
As per the agreement, Uno Re processed the claim submitted by Umbrella Network. Upon the investigation conducted by Uno Re's Claims Assessment Team, the details have been forwarded to the Uno Re Claims Adjudication Committee for a vote and the committee has decided to accept the claim.
As a result, users whose assets are irrecoverably lost are entitled to receive up to $10k each as stated in the contract between Uno Re and Umbrella Network. In conclusion, 91% of affected wallet addresses are being covered and appropriately compensated as per the cover terms and conditions.