Oracle Machine invasion triggers emergency DAO vote, Lido security

According to The Block, an Oracle Machine for the Ethereum stake protocol Lido was attacked on Saturday, leading the Lido DAO to vote to rotate the Address.

The attack caused a loss of about 1.5 ETH, which the Oracle Machine operator Chorus One referred to as an “isolated incident.”

“The protocol is still secure and operating normally,” Lido stated.

The Ethereum staking protocol Lido suffered a loss of nearly 1.5 ETH after an attacker breached its protocol and reported the Oracle Machine, leading to an emergency DAO vote to rotate the Address of the Oracle Machine. Currently, Lido remains “completely safe and operating normally.”

Chorus One stated that the attack appears to be an “isolated incident” and poses no further threat to the protocol. “We have conducted a thorough audit of our infrastructure and found no broader vulnerabilities,” Chorus One wrote on X.

Blockchain data indicates that attackers extracted 1.46 ETH, approximately 3800 dollars, from the compromised Address. “We are still investigating from all angles; we will share a complete post-mortem analysis after the investigation is over,” Chorus One added on Lido’s governance forum. “The attackers’ activities indicate that this was an automated system, rather than a targeted attack.”

Although the attacker was able to extract the ETH balance of the Oracle Machine address (Chorus One indicated that this balance is intentionally kept low), the attack did not threaten Lido’s operations, as its protocol requires 5/9 consensus from the Oracle Machine.

“In the worst-case scenario, [damaged Oracle Machine] could mean that the re-benchmarking of stETH (whether positive or negative) will take longer to achieve, which will affect stETH holders, but in most cases, the impact is negligible, except for those who use stETH with leverage in DeFi,” wrote Izzy, head of validators at Lido, on X.

Currently, the Lido DAO voting has received full support for the rotation of the damaged Address, but it has not yet reached the quorum.

“Oracles are complex, and their use in DeFi varies,” Izzy wrote. “In Lido, they are a well-considered part, and potential negative impacts are significantly mitigated through effective decentralization, functional separation, and multilayer checks.”