Session CRT-20260608 — 8 June 2026 · Morning Edition

Look, this isn't some next-gen APT playbook. It's a cashier skimming fractions of a penny until the vault is empty — except the cashier is a bot, the register is a stable-swap invariant, and it hit six networks in thirty minutes because someone copy-pasted the same buggy contract to every chain.

Kill chain: how rounding becomes a drain

Composable Stable Pools are built around an invariant — essentially a polynomial equation that says how reserves must balance after any trade. Because Ethereum doesn't do floating-point math, the Newton-Raphson iterations to solve that polynomial are stuffed into integer arithmetic with repeated division. Every division truncates or rounds down.

Here's where the attack surface opens: the attacker issues a long, alternating batch-swap sequence (Coinspect calls this out explicitly) — thousands of tiny back-and-forth swaps between correlated stable assets and the pool's own BPT token. OpenZeppelin notes that in ComposableStablePools the BPT itself is tradeable inside the pool, which means the internal accounting is doing double duty as both LP token and swappable reserve.

Each individual swap looks benign. The rounding error is maybe one wei. But because the attacker controls both sides of the sequence, they can force the invariant onto a rounding boundary where the pool consistently rounds in their favor. Do it enough times and those fractional wei errors compound into full basis points of slippage that the protocol misprices as real. The pool's internal reserve accounting drifts from reality. Once the phantom imbalance is large enough, the attacker cashes out real collateral — USDC, DAI, whatever — while leaving the pool under-collateralized. The pool thinks it's balanced; the assets are gone. According to Check Point Research, that mechanism is exactly what moved $128M out the door.

Why eleven audits didn't stop it

Trail of Bits explicitly said they had flagged this class of bug in an earlier audit, which tells you the problem isn't always detection — it's recognition that the math is weaponizable.

Most auditors treat the stable-swap invariant as a solved problem. They verify the formula is algebraically correct and maybe fuzz a few swaps, but they don't model cumulative arithmetic drift across chained batched swaps. This is a CWE-682 (Incorrect Calculation) issue that only manifests under sustained adversarial sequencing. Standard test harnesses usually check single-swap invariants like "did k increase?" or "is there flash-loan grief?" — they aren't engineered to simulate ten thousand alternating round-trips.

The composable BPT-as-asset design also breaks the auditor's mental model. When the LP token is simultaneously an internal accounting entry and a tradable balance, rounding errors in the invariant bleed into the share-minting logic. Auditors look at the curve math and the vault logic separately; they miss the cross-layer bleed because it lives in the boundary between them. So yes, it can survive eleven audits if those audits treat integer math as "close enough" and don't build adversarial batch-swap loops as long as the attacker did.

Operational picture: the six-chain "cascade"

There is no cross-chain sequencing dependency here. This is not a bridge attack. The attacker isn't waiting for an event on Ethereum to trigger something on Polygon.

Because DeFi protocols deploy identical bytecode across chains via deterministic factory patterns, the exploit is plug-and-play. Once the attacker proves the invariant drift on one network, they have the exact call sequence for the other five. Operationally, they script the exploit against each chain's pool addresses and fire the transactions in parallel. Thirty minutes across Ethereum, Arbitrum, Base, Polygon, OP Mainnet, and Sonic isn't coordination lag — it's just how fast the mempools processed six independent bundles.

Think of it like finding one bad master key and then immediately trying it on six identical locks. The only reason they fall "simultaneously" is because the code was cloned, not because the chains interact.

The fix isn't just patch one chain — you have to break the deterministic clone-and-deploy habit, or auditors need to start treating integer rounding in iterative invariants as a primary threat class, not a rounding error.

Halil, here are the numbers.

The Balancer V2 incident is our confirmed floor: ~$128 million drained across Ethereum, Arbitrum, Base, Polygon, Sonic, and OP Mainnet. Check Point Research, as cited by CryptoRank, notes the exploit hit all six chains at once because the same rounding-direction flaw in the pools' invariant math had been copied identically everywhere. Trail of Bits confirms the root cause was a rounding-direction issue present for years. That gives us a direct loss of roughly $21 million per chain, which is squarely within the $20 million–$30 million band for a standalone single-chain AMM exploit. The simultaneous six-chain reach gives you an immediate 6× multiplier on direct protocol loss before any contagion.

The compounding factor is speed. Since the vulnerability was the same code on every chain, the attacker can drain alt-chain pools while Ethereum defenders are still reading the transaction trace. MEV bots and copycat exploiters propagate within minutes, creating effectively zero patch window between chains. I estimate that speed premium adds roughly 50% on top of the raw 6× chain count, pushing the modeled direct damage for the next event of this class toward $200 million.

Second-order contagion breaks across four vectors in my model:

• Liquidity providers eat the underlying pool losses — approximately $130 million.
• CEX counterparties holding bridged or wrapped deposits face impairment; based on bridge exploit precedents like the KelpDAO $292 million incident, I model roughly $60 million in write-downs.
• Insurance pools take a capital shock. DataIntelo reports Nexus Mutual alone carries $2.1 billion in active cover across 120+ protocols.
• Institutional bridges relying on the same invariant math for pricing face freeze or haircut events; I model another $60 million in bridge impairment.

My 90-day cascade scenario therefore totals roughly $400 million–$500 million in exposure.

As for the risk-transfer market — DeFi insurance is structurally misfit for this. DataIntelo values the global DeFi insurance market at $1.8 billion in 2025. Carriers price risk per protocol, per chain, with segregated capital pools. A correlated multi-chain event driven by identical copied code breaks the independence assumptions those pools rely on. I estimate a $200 million correlated smart-contract claim would consume a material share of available sector capital in a single hit. In plain terms: the market is not capitalized for cross-chain covariance from shared-code risk. Until coverage models treat multi-chain deployments as a single risk unit with parametric, protocol-agnostic pricing, this class of exposure is effectively uninsurable at scale.

CEO framing — three bullets:

1. Material 90-day exposure from one copied invariant-math library: $400 million–$500 million.
2. Current DeFi insurance pricing assumes chain-level independence; correlated six-chain events are not adequately capitalized.
3. Decision needed by Friday on emergency code-audit budget for any protocol running copied stable-pool math across multiple chains.

Look, the KelpDAO case from April gives us the blueprint for what works and what doesn't. Chainalysis explicitly warned after that $292M exploit that protocols must implement real-time invariant monitoring to detect when systems enter impossible states — like 116,500 rsETH minted on Ethereum without a corresponding burn verification. That's your circuit-breaker right there: not just an admin pause function, but continuous cross-chain validation that global invariants hold. Meanwhile, the XChainWatcher research shows we can use standard debug_traceTransaction with the callTracer parameter on EVM nodes to monitor execution traces and transferred values across bridges for anomalies — that's concrete detection logic you can operationalize today.

For organizations relying on this infrastructure, you need to abandon the idea that six identical deployments equal six independent risks. OpenZeppelin's framework is clear: DeFi risk demands a different mental model than traditional finance. My view is treat that shared codebase as a single correlated failure domain. When you model exposure, assume one rounding or invariant flaw detonates everywhere simultaneously. The KelpDAO incident wasn't just a code bug — it was a 1-of-1 validator quorum configuration that was unsafe at scale, which means deployment parity across chains can actually amplify blast radius rather than contain it.

The defensive lesson is straightforward: per-chain audits are blind to system-level invariant violations. The April incident proved code can execute perfectly on each individual chain while the global system enters an impossible state. You need cross-chain monitoring looking at aggregate conditions — mint/burn parity, total supply consistency, validator quorum integrity — not just local contract correctness. I found no current advisory suggesting mature commercial circuit-breakers are widely deployed for this, so operational teams are largely building their own on top of trace monitoring and behavioral signals like transaction failure rates.

Priority matrix:

• CRITICAL (do today): Map your cross-chain invariants. If you can't define "impossible state" for your protocol globally, you cannot detect mid-exploit divergence.
• HIGH (do this week): Deploy RPC-level execution trace monitoring using callTracer outputs on bridge transactions, per the XChainWatcher methodology. It runs on standard go-ethereum nodes.
• MEDIUM (schedule): Force shared-code deployments into a single blast-radius unit in your risk register. One coordinated response playbook, not six chain-specific ones.