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Liquidity pool (LP) Safemoon lost $8.9 million worth of tokens on March 29 after hackers were able to manipulate a faulty smart contract feature, CoinDesk reported. According to blockchain data, a number of tokens were swapped early Wednesday morning in a single transaction. The hackers stole a huge volume of Safemoons native SFM tokens.

Safemoons tokens lost more than 40% immediately after the attack, then made a slight recovery. Pool developers tweeted that the liquidity pair SFM:BNB had been compromised. They added they were taking rapid action to try and solve the problem as soon as possible.

Soon thereafter, Safemoon CEO John Karony tweeted that the attack only involved one LP on BNB Chain:

A liquidity pool is a collection of crypto assets locked in a smart contract. These pools enable decentralized lending, borrowing, and trading directly between users without needing to use intermediaries.

Safemoon was one of the biggest winners in 2021s spectacular crypto bull market. This is partly thanks to the DeFi tokens four features, which can be observed during each trade: LP acquisition, fee reflection, fund growth, and token burn.

However, it was precisely the last feature that turned out to be faulty according to experts. Dappd CEO DeFi Mark tweeted:

He added that the hacker or hackers had manipulated this function to move SFM tokens out of the Safemoon-WBNB LP, which resulted in an artificial increase of SFMs price. In his opinion, many smart contracts have suffered this exploit despite it being extremely elementary.

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Safemoon LP Drained of $9M in Smart Contract Attack - BanklessTimes