Synthetix Asset Platform Lost $1 Billion in Less Than 60 Minutes to Sophisticated Trading Bots: Funds Recovered

Based on a recent report, Synthetix, an Ethereum-based synthetic asset issuance platform has lost track of over 37 million synthetic Ether (sEther) and therefore stopped every form of trading on its platform which led to users not being able to access the platform for one day. This resulted in trades with 1000x profits worth $1 billion in less than 60 minutes.

Reportedly, a Synthetix oracle, responsible for providing external data to Synthetix’s smart contracts, transmitted false data on June 25. This false data transmission was taken advantage of by the bot. According to the firm, all funds have been recovered.

Trading Synthetic Currencies

The Australian-based firm allows its users to mint and trade synthetic currencies using a peer-to-peer method and its synthetic currencies allow traders to know the value of some currencies like Ether and Bitcoin.
The company also makes it easy for its customers to hold Ether and Bitcoin without the need for a crypto wallet.

Synthetix crypto-backed synthetic asset tokens track Korean won, Australian dollar, Japanese yen, gold, and euro.

Also, Synthetix which was established in the summer of 2018 has a stablecoin which is priced against the US dollar and since its users trade assets that represent their underlying assets and track the prices of those assets, whenever a user trades sUSD into sBTC at $10,000 per BTC and the price increases to $12,000 per BTC, they are allowed to trade that back into $12,000 of sUSD making a profit of $2,000 sUSD.

Meanwhile, Synthetix is not the only platform which provides synthetic cryptocurrencies. Abra offers a service which allows its customers to become exposed to any other fiat currency such as USD, PHP, EUR or any digital currencies other than Bitcoin (e.g., DGB, XRP), supported via smart contracts on the Litecoin and Bitcoin networks.
So if a customer deposits 1 BTC into an Abra wallet and then decides to purchase 10 DGB with it, Abra creates a smart contract which assures the right to 10 DGB. The DGB can then be converted to BTC and then its worth is calculated.