Smart Contract Attacks: The Most Memorable Blockchain Hacks of All Time

Paulina Lewandowska

30 Dec 2022
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Due to their ability to automate financial procedures and transactions, smart contracts have the potential to completely change the way we conduct business. They are not impervious to security flaws, though, as is the case with other technologies. There have been a number of smart contract hacks in the past that have caused large losses and damaged the community's confidence. The most famous smart contract hacks ever will be covered in this article, along with the lessons that may be drawn from them. These incidents—from the DAO hack to the Bancor hack—have had a long-lasting effect on the blockchain sector and serve as reminders of the value of properly safeguarding smart contracts.

The DAO hack

A decentralized venture capital fund for the cryptocurrency and decentralized technology industries was one of the goals of the Decentralized Autonomous Organization, or DAO. Its decentralized architecture was designed to cut expenses while giving investors more power and access. The DAO was designed to run decentralized, relying on the collective judgment of its investors.

A flaw in the coding of The DAO, a smart contract on the Ethereum blockchain, was found by a hacker on June 17, 2016. This gave the attacker the ability to ask the contract to send money to them repeatedly, leading to the theft of 3.6 million ETH, which was then valued at about $70 million. Due to two flaws in the contract's architecture, the exploit was made possible: a mechanism that first transmitted the ETH and then modified the internal token balance was not designed to account for the possibility of repeated calls.

A flaw in the coding of The DAO, a smart contract on the Ethereum blockchain, was found by a hacker on June 17, 2016. This gave the attacker the ability to ask the contract to send money to them repeatedly, leading to the theft of 3.6 million ETH, which was then valued at about $70 million. Due to two flaws in the contract's architecture, the exploit was made possible: a mechanism that first transmitted the ETH and then modified the internal token balance was not designed to account for the possibility of repeated calls.

The Veritaseum hack

A cryptocurrency called Veritaseum was introduced in 2017. A cyberattack at Veritaseum in April 2018 cost the company the equivalent of $8.4 million in cryptocurrencies.

The Veritaseum cryptocurrency's smart contract had a flaw that allowed for the hack to take place. By using a reentrancy attack, the flaw allowed an attacker to siphon money from the Veritaseum smart contract. In a reentrancy attack, an attacker can run a smart contract's function repeatedly before the state of the contract is changed, allowing the attacker to remove money from the contract before the state is updated to reflect the withdrawal.

The Veritaseum attack served as a reminder of the value of properly protecting smart contracts as well as the possible dangers of employing them. It also emphasized the necessity of rigorous testing and auditing of smart contracts to make sure they are safe and without flaws.

The Bancor hack

On the Ethereum blockchain, the Bancor network is a decentralized exchange that enables users to purchase and sell a range of different cryptocurrencies. The Bancor network was hacked in July 2018, and as a result, about $12 million worth of cryptocurrency was lost.

The hack was conducted by taking advantage of a weakness in the smart contract that controlled the Bancor network. Due to a vulnerability, an attacker was able to take over the Bancor contract and steal money from it. In order to stop more losses, the Bancor team was able to react to the attack promptly and halt trading on the site.

The Bancor attack served as a reminder of the value of properly protecting smart contracts as well as the possible dangers of employing them. It also emphasized the necessity of rigorous testing and auditing of smart contracts to make sure they are safe and without flaws.

Hacks in DEFI

Decentralized finance (DeFi) projects benefit greatly from smart contracts since they enable automated, self-executing financial processes and transactions. They are used to speed up, confirm, and enforce contract negotiations and performance.

Because smart contracts can be used to enable a variety of financial transactions and handle large quantities of money, smart contract security is crucial in DeFi projects. If a smart contract is not adequately protected, attackers may leverage its flaws to steal money from it or engage in other forms of contract manipulation. Users of the DeFi project may suffer large losses as a result, and the initiative's credibility and dependability may be harmed.

The bZx hack

A decentralized finance (DeFi) platform called bZx enables users to utilize smart contracts to borrow and lend cryptocurrency. bZx experienced two different attacks in February 2020 that took use of holes in its smart contracts.

On February 14, 2020, a hacker used a flaw in the bZx smart contract to steal about $6 million worth of cryptocurrency. This was the first theft. On February 18, 2020, a fresh vulnerability in the bZx smart contract was used by a different hacker to steal an additional $350,000 worth of cryptocurrency.

The bZx hacks were caused by flaws in the bZx smart contracts, which let attackers take advantage of them and steal money from them. The intrusions served as a reminder of the value of properly protecting smart contracts as well as the possible dangers of employing them. To ensure the security and lack of vulnerabilities in their smart contracts, DeFi projects must thoroughly test and audit them.

The Harvest Finance hack

The Harvest Finance hack was a security issue that happened in October 2020. An attacker used a smart contract weakness to steal cryptocurrencies valued at about $24 million. A decentralized finance (DeFi) technology called Harvest Finance enables users to generate yield by supplying liquidity to various financial marketplaces.

The hack happened when a perpetrator drained funds from the Harvest Finance smart contract by taking advantage of a flaw in it. Due to a vulnerability, the attacker was able to alter the contract and withdraw money from it without setting off the security features. The Harvest Finance team was able to stop trading on the platform to stop more losses after the hack was identified many hours after it happened.

The Akropolis hack

The Akropolis decentralized finance (DeFi) platform was attacked on November 12, 2020, when a protocol flaw resulted in the loss of about 2,030,841.0177 DAI from the impacted YCurve and sUSD pools. The problem was caused by a bug in the platform's SavingsModule smart contract's handling of the deposit logic, which gave the attacker the ability to create a significant number of pool tokens without the support of valued assets. This happened because the protocol did not correctly impose reentrancy protection on the deposit logic and validate supported tokens. Users of the Akropolis platform experienced severe disruption and losses as a result of the Smart Contract Hacks.

Conclusion - Smart Contract Hacks

One cannot stress the significance of properly safeguarding smart contracts. Smart contracts are capable of handling large quantities of value and a variety of financial activities. If a smart contract is not properly secured, it may cause consumers to suffer large losses and jeopardize the project's legitimacy and dependability.

Because of this, it is crucial that smart contracts undergo extensive testing and auditing. Smart contracts can be made secure and fault-free with the aid of testing and auditing. It is an essential stage in the creation process and can aid in safeguarding the security of blockchain projects and ensuring their smooth operation.

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AI in Real Estate: How Does It Support the Housing Market?

Miłosz Mach

18 Mar 2025
AI in Real Estate: How Does It Support the Housing Market?

The digital transformation is reshaping numerous sectors of the economy, and real estate is no exception. By 2025, AI will no longer be a mere gadget but a powerful tool that facilitates customer interactions, streamlines decision-making processes, and optimizes sales operations. Simultaneously, blockchain technology ensures security, transparency, and scalability in transactions. With this article, we launch a series of publications exploring AI in business, focusing today on the application of artificial intelligence within the real estate industry.

AI vs. Tradition: Key Implementations of AI in Real Estate

Designing, selling, and managing properties—traditional methods are increasingly giving way to data-driven decision-making.

Breakthroughs in Customer Service

AI-powered chatbots and virtual assistants are revolutionizing how companies interact with their customers. These tools handle hundreds of inquiries simultaneously, personalize offers, and guide clients through the purchasing process. Implementing AI agents can lead to higher-quality leads for developers and automate responses to most standard customer queries. However, technical challenges in deploying such systems include:

  • Integration with existing real estate databases: Chatbots must have access to up-to-date listings, prices, and availability.
  • Personalization of communication: Systems must adapt their interactions to individual customer needs.
  • Management of industry-specific knowledge: Chatbots require specialized expertise about local real estate markets.

Advanced Data Analysis

Cognitive AI systems utilize deep learning to analyze complex relationships within the real estate market, such as macroeconomic trends, local zoning plans, and user behavior on social media platforms. Deploying such solutions necessitates:

  • Collecting high-quality historical data.
  • Building infrastructure for real-time data processing.
  • Developing appropriate machine learning models.
  • Continuously monitoring and updating models based on new data.

Intelligent Design

Generative artificial intelligence is revolutionizing architectural design. These advanced algorithms can produce dozens of building design variants that account for site constraints, legal requirements, energy efficiency considerations, and aesthetic preferences.

Optimizing Building Energy Efficiency

Smart building management systems (BMS) leverage AI to optimize energy consumption while maintaining resident comfort. Reinforcement learning algorithms analyze data from temperature, humidity, and air quality sensors to adjust heating, cooling, and ventilation parameters effectively.

Integration of AI with Blockchain in Real Estate

The convergence of AI with blockchain technology opens up new possibilities for the real estate sector. Blockchain is a distributed database where information is stored in immutable "blocks." It ensures transaction security and data transparency while AI analyzes these data points to derive actionable insights. In practice, this means that ownership histories, all transactions, and property modifications are recorded in an unalterable format, with AI aiding in interpreting these records and informing decision-making processes.

AI has the potential to bring significant value to the real estate sector—estimated between $110 billion and $180 billion by experts at McKinsey & Company.

Key development directions over the coming years include:

  • Autonomous negotiation systems: AI agents equipped with game theory strategies capable of conducting complex negotiations.
  • AI in urban planning: Algorithms designed to plan city development and optimize spatial allocation.
  • Property tokenization: Leveraging blockchain technology to divide properties into digital tokens that enable fractional investment opportunities.

Conclusion

For companies today, the question is no longer "if" but "how" to implement AI to maximize benefits and enhance competitiveness. A strategic approach begins with identifying specific business challenges followed by selecting appropriate technologies.

What values could AI potentially bring to your organization?
  • Reduction of operational costs through automation
  • Enhanced customer experience and shorter transaction times
  • Increased accuracy in forecasts and valuations, minimizing business risks
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Want to implement AI in your real estate business?

Nextrope specializes in implementing AI and blockchain solutions tailored to specific business needs. Our expertise allows us to:

  • Create intelligent chatbots that serve customers 24/7
  • Implement analytical systems for property valuation
  • Build secure blockchain solutions for real estate transactions
Schedule a free consultation

Or check out other articles from the "AI in Business" series

AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

Gracjan Prusik

11 Mar 2025
AI-Driven Frontend Automation: Elevating Developer Productivity to New Heights

AI Revolution in the Frontend Developer's Workshop

In today's world, programming without AI support means giving up a powerful tool that radically increases a developer's productivity and efficiency. For the modern developer, AI in frontend automation is not just a curiosity, but a key tool that enhances productivity. From automatically generating components, to refactoring, and testing – AI tools are fundamentally changing our daily work, allowing us to focus on the creative aspects of programming instead of the tedious task of writing repetitive code. In this article, I will show how these tools are most commonly used to work faster, smarter, and with greater satisfaction.

This post kicks off a series dedicated to the use of AI in frontend automation, where we will analyze and discuss specific tools, techniques, and practical use cases of AI that help developers in their everyday tasks.

AI in Frontend Automation – How It Helps with Code Refactoring

One of the most common uses of AI is improving code quality and finding errors. These tools can analyze code and suggest optimizations. As a result, we will be able to write code much faster and significantly reduce the risk of human error.

How AI Saves Us from Frustrating Bugs

Imagine this situation: you spend hours debugging an application, not understanding why data isn't being fetched. Everything seems correct, the syntax is fine, yet something isn't working. Often, the problem lies in small details that are hard to catch when reviewing the code.

Let’s take a look at an example:

function fetchData() {
    fetch("htts://jsonplaceholder.typicode.com/posts")
      .then((response) => response.json())
      .then((data) => console.log(data))
      .catch((error) => console.error(error));
}

At first glance, the code looks correct. However, upon running it, no data is retrieved. Why? There’s a typo in the URL – "htts" instead of "https." This is a classic example of an error that could cost a developer hours of frustrating debugging.

When we ask AI to refactor this code, not only will we receive a more readable version using newer patterns (async/await), but also – and most importantly – AI will automatically detect and fix the typo in the URL:

async function fetchPosts() {
    try {
      const response = await fetch(
        "https://jsonplaceholder.typicode.com/posts"
      );
      const data = await response.json();
      console.log(data);
    } catch (error) {
      console.error(error);
    }
}

How AI in Frontend Automation Speeds Up UI Creation

One of the most obvious applications of AI in frontend development is generating UI components. Tools like GitHub Copilot, ChatGPT, or Claude can generate component code based on a short description or an image provided to them.

With these tools, we can create complex user interfaces in just a few seconds. Generating a complete, functional UI component often takes less than a minute. Furthermore, the generated code is typically error-free, includes appropriate animations, and is fully responsive, adapting to different screen sizes. It is important to describe exactly what we expect.

Here’s a view generated by Claude after entering the request: “Based on the loaded data, display posts. The page should be responsive. The main colors are: #CCFF89, #151515, and #E4E4E4.”

Generated posts view

AI in Code Analysis and Understanding

AI can analyze existing code and help understand it, which is particularly useful in large, complex projects or code written by someone else.

Example: Generating a summary of a function's behavior

Let’s assume we have a function for processing user data, the workings of which we don’t understand at first glance. AI can analyze the code and generate a readable explanation:

function processUserData(users) {
  return users
    .filter(user => user.isActive) // Checks the `isActive` value for each user and keeps only the objects where `isActive` is true
    .map(user => ({ 
      id: user.id, // Retrieves the `id` value from each user object
      name: `${user.firstName} ${user.lastName}`, // Creates a new string by combining `firstName` and `lastName`
      email: user.email.toLowerCase(), // Converts the email address to lowercase
    }));
}

In this case, AI not only summarizes the code's functionality but also breaks down individual operations into easier-to-understand segments.

AI in Frontend Automation – Translations and Error Detection

Every frontend developer knows that programming isn’t just about creatively building interfaces—it also involves many repetitive, tedious tasks. One of these is implementing translations for multilingual applications (i18n). Adding translations for each key in JSON files and then verifying them can be time-consuming and error-prone.

However, AI can significantly speed up this process. Using ChatGPT, DeepSeek, or Claude allows for automatic generation of translations for the user interface, as well as detecting linguistic and stylistic errors.

Example:

We have a translation file in JSON format:

{
  "welcome_message": "Welcome to our application!",
  "logout_button": "Log out",
  "error_message": "Something went wrong. Please try again later."
}

AI can automatically generate its Polish version:

{
  "welcome_message": "Witaj w naszej aplikacji!",
  "logout_button": "Wyloguj się",
  "error_message": "Coś poszło nie tak. Spróbuj ponownie później."
}

Moreover, AI can detect spelling errors or inconsistencies in translations. For example, if one part of the application uses "Log out" and another says "Exit," AI can suggest unifying the terminology.

This type of automation not only saves time but also minimizes the risk of human errors. And this is just one example – AI also assists in generating documentation, writing tests, and optimizing performance, which we will discuss in upcoming articles.

Summary

Artificial intelligence is transforming the way frontend developers work daily. From generating components and refactoring code to detecting errors, automating testing, and documentation—AI significantly accelerates and streamlines the development process. Without these tools, we would lose a lot of valuable time, which we certainly want to avoid.

In the next parts of this series, we will cover topics such as:

Stay tuned to keep up with the latest insights!