Decentralized finance leader Thala has resumed operations just one day following a significant security breach that resulted in the exploitation of its liquidity pools, amounting to approximately $25.5 million.
On November 17, Thala announced via social media that all services have been restored except for its staking feature, which is currently undergoing necessary updates and audits.
This decision arrives after the protocol revealed a security incident on November 15, where an attacker managed to withdraw substantial amounts of liquidity tokens due to a vulnerability in the protocol’s v1 farming contracts, introduced after a recent software update.
Thala responded swiftly by suspending all services immediately after identifying the breach and successfully freezing $11.5 million worth of assets associated with the protocol, which includes the native THL token and Move Dollar (MOD).
The protocol’s reliance on the Move programming language, foundational to the Aptos blockchain, enabled the freezing and controlling of digital assets effectively, treating them as essential resources.
To recover additional funds, Thala collaborated with a team of DeFi security experts and on-chain investigators, as well as law enforcement, to locate the perpetrator. The hacker has reportedly agreed to return all user assets in exchange for a $300,000 bounty.
Thala has reassured its users that their positions will be restored to “100% whole,” requiring no action from them.
Currently, the total value locked in Thala has seen a decline from $234 million to $196 million, with THL experiencing a significant drop of over 31% since the breach.
This incident is part of a growing trend of attacks on decentralized protocols in recent months. Notably, DeFi lender Radiant Capital suffered a loss of around $50 million due to a similar exploit on October 16.
Furthermore, a September incident involving Bedrock, a staking protocol, resulted in an estimated loss of $2 million due to a bug that allowed cybercriminals to drain funds from the protocol’s liquidity pools.
According to blockchain security firm PeckShield, crypto hacks resulted in approximately $88.4 million in losses in October alone, with total on-chain losses reaching $181 million.
