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User Exploits an Anchor Protocol Bug to Cash an Easy $800,000

It’s been only two days since Terra (LUNA) 2.0 launched, and a user already found the opportunity to make a quick $800,000 fr

It’s been only two days since Terra (LUNA) 2.0 launched, and a user already found the opportunity to make a quick $800,000 from a bug in the Anchor Protocol before developers fixed the issue. Following the re-launch of the Terra ecosystem, the bug turned out as a lucky charm for the user who was able to cash out the money.

Terraform Labs went through the most challenging month since its inception. The depeg of the TerraUSD (UST) alongside the collapse of the Terra ecosystem, led to the catastrophic crash of the overall crypto market. Terraform Labs developed a recovery plan for the launch of the LUNA 2.0 mainnet, also referred to as Phoenix-1, which went live on Saturday (May 28). A few consider it might recover the overall Terra ecosystem, while others say it’s another trap and investors should refrain from investing in it.

Several investors who once had plans to purchase LUNA 2.0 once the market has stabilized now have anticipated the Terra ecosystem to further collapse. On the other hand, investors who have invested previously in Anchor Protocol said they would rather cash out as they think it’s a dead end. Crypto influencer and investor Lark Davis took to Twitter yesterday and announced to his 988,000 followers that he doesn’t plan on investing in LUNA 2.0 tokens, and will dump any airdrop if there’s something with higher returns on Binance.

However, the LUNA 2.0 launch seems to have emerged as a one-of-its-kind opportunity for this user.

Anchor Protocol Bug Made it Possible for the User to Get Some Quick Bucks

The user took advantage of the Anchor Protocol vulnerability when the price of LUNA Classic touched $5, even though the token wasn’t worth anything close to it. The user found the flaw and deposited approximately 20 million Lido Bonded Luna tokens, which the platform valued at $100 million by mistake.  Although the deposited money should be worth only $200,000, the user discovered the vulnerability and took a loan of around 40 million UST. Before Terra developers realized the flaw, the user withdrew the UST for a whopping $800,000.

Other users slowly noticed the vulnerability when they tried to make use of this opportunity. However, the team at Terraform Labs was quick enough to identify the bug and fix it. Users who tried to make some easy money soon faced an error.

In terms of price, LUNA 2.0 didn’t see the best performance following the launch. The price of LUNA 2.0 stood at $18.87 immediately after its launch on Saturday, but it plummeted by 70% to nearly $5.71, according to a study by CoinGecko. A few investors consider the severe plunge to be because of Do Kwon’s lack of faith in the revival plan.

Under Do Kwon’s recovery plan, the new LUNA 2.0 tokens are now being airdropped on crypto exchanges to small and big investors that previously invested in LUNC, TerraUSD Classic (USTC), and Anchor Protocol UST (aUST). Several major cryptocurrency exchanges and trading platforms including Binance have extended support by listing the new LUNA 2.0 token on their platforms. For example, Binance has even announced plans to list the token via its Innovation Zone — a trading platform where users can trade highly volatile and risky assets. Only time will tell how the new Terra (LUNA) 2.0 tokens will perform in the future, and if the Terra ecosystem will survive.