BXH encountered a security incident, exposing Smart Pool risks

Recently, the decentralized yield protocol BXH experienced a significant security incident, resulting in approximately $139 million in crypto assets being stolen. The event occurred on the BSC chain, and assets on other chains have not yet been affected, but all deposit and withdrawal functions have been closed just in case.

According to analysis by a blockchain security organization, hackers have transferred assets from the BXH vault by obtaining management permissions. Currently, some of the stolen funds have been transferred to other chains and addresses. This incident has attracted widespread attention, with ongoing doubts and suspicions about possible insider involvement. The officials stated that they are investigating the cause of the private key leak and are offering a reward of $1 million for the recovery of the funds.

This incident also affected the Smart Pool projects that rely on BXH. Multiple Smart Pools were forced to suspend their withdrawal functions, with the largest affected project being associated with funds as high as $150 million. Some smaller Smart Pools, which had locked funds in larger projects to amplify returns, were similarly unable to escape the impact.

This issue exposes the potential risks of the Smart Pool model. Currently, the Smart Pool mainly obtains high returns by frequently operating between different lending protocols, which amplifies both profits and risks. Any problem in any link could lead to the collapse of the entire system.

There are opinions that Smart Pool should publicly disclose every operation and the flow of funds, allowing investors to independently assess risks. Some well-known projects have adopted this approach, while many domestic projects still have room for improvement in transparency.

From a traditional financial perspective, the current operating model of the Smart Pool is difficult to sustain. In the future, the Smart Pool may need to evolve towards more complex financial products, raising technical barriers and leveraging the advantages of professional institutions. This incident also highlights the common security challenges faced by blockchain projects, and the existence of the Smart Pool may further amplify this risk.