In essence, Beanstalk allows anyone to deposit tens of millions of dollars in virtual currency into a software system, generating interest and helping to maintain the value of a stablecoin called a bean.
The project does not operate like a traditional startup. Like many crypto foundersMr. Weintraub and his associates – Brendan Sanderson, 25, and Michael Montoya, 24 – kept their identities secret, calling themselves Publius, to pay their respects to the authors of the Joint Articles. state. When the software was released in August 2021, users who deposited their cryptocurrencies received votes in a collective of investors known as the Decentralized Autonomous Organization, or DAO. must agree to make changes to the software.
Beanstalk’s collective governance has finally been undone. In April, a hacker borrowed $1 billion in crypto from another DeFi project, Aave. This transaction is called an instant loan – a lightning-fast process in which crypto users borrow money without posting any collateral, execute the transaction, and then pay back the loan instantly. immediately, withhold any profits generated from the exchange chain almost simultaneously.
The code that Mr Weintraub and his partners designed has no mechanism to prevent someone from using a quick loan to take over the platform. So the hackers used $1 billion to claim a huge stake in the Beanstalk DAO, taking full control of the management of the software. The hacker then moved everyone’s money – almost $200 million in total – out of the Beanstalk system.
Panic ensued. “I lost 1 million dollars today”, a Beanstalk user declare on Youtube. “It happened through the pea.”
Some users suspect that Mr. Weintraub and the other founders were behind the attack – a classic “drag the rug” in which a group of developers flee with investors’ money.
Mr Weintraub said: “The pads are out. “It’s like death.”
In the end, he and the other founders decided to continue the project. They reported the theft to the FBI and held calls with Beanstalk enthusiasts to find the way forward. In an april parcel on the Discord chat forum, they also revealed their identities for the first time. It’s a risky move: While the project isn’t a traditional business, they could be vulnerable to user lawsuits or regulatory scrutiny.
