Hacking events - flashloan attack: presented by Epiphany

Epiphany
Hacking events: flashloan attack
CEO
郑陈宬 Zheng Chencheng
Stella
HR
黄旖彤 Huang Yitong
Tiffany
Marketing Director
李佳睿 Li Jiarui
Carl
CIO
沈芸伊 Shen Yunyi
Amy
Manager
KAN KHENA

BULLET POINTS OF PRO
1、Traditional lenders take on two forms of risk. Flash loans mitigate both risks including default
risk and illiquidity risk.
2、Indeed, flash loans should be free basically.
3、all transactions of flash loan are conducted on one chain of the blockchain. The
characteristics of distributed storage in the blockchain ensure that each transaction of flash loan
is transparent.

BULLET POINTS OF CON
Cons:
1. The potential for a leverage attack
2.DeFi could be a hotbed of Flash Loan malicious arbitrage with potential leverage attacks
3.Can be accumulated
4.Short-term loans minimize the stigma of an attacker
Example:
BZx had two attacks in the last week, two attacks are DeFi smart contracts, in all sorts of DeFi
loopholes exist in the process of the combination of the products, and through the new species of
lightning DeFi ecological credit (Flash Loan), within a block can be reimbursement without collateral
characteristics, can let oneself without any chip, would like the company through the pre-written
script to borrow, again through the large loans for leveraged deals and for relatively small amount of
market manipulation, in order to achieve a profit.

Strategy to improve problem 1
bZx allows the leakage of supposedly-locked bZx funds directly to an individual account without
the further need of absorbing the leaked funds into a compound position. And this mechanism will
also affect other tokens because lenders can deposit one token to borrow another token for profit
SOLUTION1 Introduce relevant rules or agreements, lock the loan destination with blockchain, make
use of the advantages of distributed ledger to make all transaction details transparent,
and forbid borrowing in other currencies with zero cost loan currency
SOLUTION2 BZX creates an account, which is specially used to store the loan of flash loan lent by the
borrower. All loans lent through flash loan must be deposited in this account first. BZX
limits the flow of funds to such accounts and prohibits direct contact with other monetary
loans. This will not solve this problem, but the fast changing market will delay the
borrower's capital operation time. In addition, in combination with the first solution, BZX
has enough reaction time to lock the fund with secret key when the borrower conducts
unreasonable operation.
SOLUTION3 Try to choose a team that simplifies technical design. They have relatively richer
software writing experience. If the corresponding architecture is larger, the direction of
hacker attacks is more. At the same time, it is necessary to pay attention to the
knowledge of the field of encryption.
SOLUTION4 Convince the flash loan pool to stop providing this service. Seriously, trying to stop the
loan pool from providing fast loans is like trying to stop noise pollution. Providing fast
loans is in the personal interest of each agreement, and for reasonable reasons, its
users want to use this feature. Therefore, we can safely eliminate it.

Strategy to improve problem 2
Reference：
https://www.odaily.com/
newsflash/182713
https://bitcoinist.com/m
akerdao-crypto-
community-goes-
defensive-following-
defi-exploits/

1/4 2/4 3/4 4/4
3-Year-Timeline Executive Plan
Conduct field research
to find the need of our
main customers,
especially small and
medium-sized
companies. (how much
money they usually
need; how long will it
take for them to give
back the money, etc.) In
addition, we also need
to find the difference
between the contracts
of our partners. Ask our employees
to make revision
based on already
existed contract
and our research
before.
Implement our outcome
in a small group of
people and companies to
find anything to be
improved. Start to show
our work to key partners
and key investors.
Finally, we
are about to
expand our
products on
a large scale.
• Ideation, market research
• We need to train professionals to reach
100 people, including investment and
financial professionals as well as
advertising and marketing team.
• Do a good job of strengthening safety
guarantee measures, and further
increase the company's popularity and
expand overseas markets.
• Officially launched the product.
Continue to cultivate professional
talents, and part of them will be trained
in the international direction. More than
500 outstanding talents.
• Target 30000 customers. 300+
transactions per day. Focus on
entering the European market,
especially Germany and Norway.

Business Partnership
With flash loan, investors can get more money
in the same period to invest in with synthetix.
Synthetix offers people more opportunity to invest in
crypto currency such as sBTC and sETH, thus the
stock of these money can increase and make the
market of flash loan larger.

郑陈宬 Stella
• A student in AEBS, East China Normal University
• Introduction to python, accounting, management and microeconomics
• Chinese, English and French
• Having interest in entrepreneurship and human resource
• Responsibility, leadership and hardworking manners
谋事在人，成事在天
Man proposes, god disposes.
https://www.linkedin.com/in/陈宬-郑-0067831a4/

About myself:
1. Name: 黄旖彤 Yitong Huang
2. Age: 18+1
3. Occupation : freshman at ECNU
4. Major : Business Administration
5. Hobbies: Ping pong , Swimming , jogging, and guitar
6. My personal linkedIn link :www.linkedin.com/in/旖彤-黄-72abbb1a3
7. The role in team 11: the “assistant” of leader ,and usually coped with technical
problems and finally become a member to warm up during every meeting(Cause I am
quite a talkative girl ).
My motto :
The so-called ”let nature take its course” is
not a matter of doing nothing but trying our
best not to force.
(所谓的顺其自然，并不是两手一摊的不
作为，而是拼尽全力后的不强求。)
Self-Introduction

Amy is a student at Asia Europe Business School, East China Normal
University. She is an active and smiling girl who comes from Taiwan but
lives in Jiangsu. She firmly believes that dancing is her life. She has learnt
Latin dance for 10 years and now she pays attention to street dance. She is
as well as interested in history, especially the World War II. But recently she
tries her best to studying English intensively. If only she could be master of
English. She is willing to take on challenges from new areas, no matter how
difficult economics is.
Email address:2766770762@qq.com
LinkedIn: www.linkedin.com/in/芸伊-沈-amy
沈芸伊 Amy
Dancing is my life.

My name is Li Jiarui. And I'm a 19-year-old student of the Asia Europe Business
School of East China Normal University. I like playing football and racing. I'm very
interested in economics. So my motto is: 经邦济世. In high school, I was exposed
to Adam Smith's theory, wealth of nations theory and some complex economic
theories. I was very interested at that time. I think the essence of the world is
economic problems, and microeconomics is an important angle for me to observe
and study the world.
https://www.linkedin.com/in/li-jiarui-8427741a4
李佳睿 Carl

overcome obstacles together collaboratively
Among all the experiences in this semester, the most impressive one is how we design our own
experiment. Unlike watching MIT courses and do some exercises, this is the first time we tried to
use creativity to do something unique. None of us has such experience before or know whether it
is appropriate or not. So we divide the assignment into several parts and think about a general
frame. Then everyone can improve the experiment when doing their own part. Our group
members are also willing to ask themselves a question“what’s that used for?” to think carefully
about this model. Finally, we are able to design our own experiment and understand how it works,
what it can proves, etc. Although there is still much for improvement, such an experience gives us
a sense of achievement and it’s great to overcome the difficulty with joint efforts.

Time: 21:02-21:15 (Beijing time)
Participants: Kan Khena, 李佳睿(Carl)，沈芸伊(Amy)，黄旖彤(Tiffany)，郑陈宬(Stella)
Date: March 12th
Conversation summary: We first have a short greeting to
get to know each other. Then we assign everyone’s work
(which is the self introduction page) according to the
assignments. And also we share the problem we meet
when completing our tasks. After that, we talk about the
affair of changing leader because of the inconvenience.
Finally, we let everyone to find inspiration for our team
name, logo and slogan and share it in our group in the
following days. We choose to discuss it in words instead of
sharing at meeting because we think this is the most
convenient and efficient way for us.
Week 1

Participants: 李佳睿(Carl)，沈芸伊(Amy)，黄旖彤(Tiffany)，郑陈宬(Stella)
Date: March 18th
Conversation summary: In this week’s meeting, we still begin
with chatting to improve our relationship. Then we discuss
the questions in questionnaire together. We help each other
to get better command of knowledge. After that, everyone
talks a bit of how they think economics and why he/she wants
to be an economist.
Week 2

Week 3
Date: March 25th
Conversation summary：In this week’s meeting, we
discussed the quiz questions together. One of our
members raised a question (listed below) which is still a
little bit confusing us. Although for this week’s meeting
Khena still can’t make it because of the time zone
problem, she promised to come next week.
Question: how to define NON-LINEAR indifferent curve?
Like the indifference curves of complete complement .
The graph of them are the corner of Rectangle ,are they
belong to the NON-LINEAR indifferent curve?

Week 4
Time: 21:00-21: 45(Beijing time)
Participants: Khena, 李佳睿(Carl)，沈芸伊(Amy)，黄旖彤(Tiffany)，郑陈宬(Stella)
Date: April 1st
Conversation summary：In this week’s meeting, first we
talked about the internet connection because it’s not
always good in other countries. We tend to use another
meeting platform to get a better connection next time. Then
we discussed the quiz questions together. Basically we
reach an agreement on the questions, we still confused
about question7 and question10. We are not very clear
about the concept “corner solution” since we don’t think the
professor in the video explain it clearly. At last we arrange
for another assignment this week, which is make a slide
individually. Because we don’t have much question on this
topic, we pass this part quickly.

Week 5
Time: 21:00-21: 45(Beijing time)
Date: April 8st
Conversation summary:
—— discuss quiz question11-14
—— review the whole problem set
——analyze the graph of substitution
effect and income effect

Week 6
Date: April 15th
—— discuss a better way to learn the
videos
—— share our brief insights about
crisis is opportunity.

Week 7
Date: April 21st
—— share our life and learning

Week 8
Time: 21:00-21:40 + 22:20-22:30 (Beijing time)
Participants: Kan Khena, 李佳睿(Carl)，沈芸伊(Amy)，黄旖彤(Tiffany)，郑陈宬(Stella)
Date: April 29th
The first meeting—— get clear of our assignments
—— discuss quiz question 10-14
The second meeting——discuss the article

Week 9
Date: May 6th
—— discuss the quiz question
—— share our thoughts gained from artwork
—— share how we spend the holiday

Week 10
Date: May 6th
—— discuss the quiz question
—— share our LinkedIn page

Week 14
Participants: 黄旖彤(Tiffany)，郑陈宬(Stella)
Date: June 7th
—— implement our project on otree

Week 15
Date: June 14th
——have a debate on our project

Week 16
Participants: all members in team10 and team11
Date: June 21st
——doing peer evaluation

Team Reflection
This spring is a special spring, and the course of microeconomics gives us a precedented experience. Unlike a
traditional class, we not only learn some basic concepts and principles in microeconomics, behavioral finance
and crypto economics, but also do some challenging tasks never met before. We learn by practice. The form of
group learning is also very helpful since we can help each other with our own different talents. The every-week-
meeting is also a good time to both discuss about difficult questions and chat with friends. We also practiced the
ability of expression and cooperation. We’ve tried many brand new things in this class that will benefit us a lot in
the future.
In the future, although we might not be a group again, at least we enhance the relationship with each other, and
we know that we can always ask friends or classmates for help because they are willing to help. The experience
of designing and implementing an experiment about “public goods” as well as doing a quite complete project
about flash loan gives us a sense of harvest and help us learn more about these two important and promising
fields, which is really helpful if we want to engage in relevant career in the future.

Self Reflection
郑陈宬 Stella
What leaves me the great impression is that I become a leader in this
spring. At first, I didn’t expect myself to be a leader, actually, I would prefer
to be an assistant so that I don’t need to take the responsibility. However,
after the whole semester of practice, I become a more responsible
person(take as much as I can into consideration) and learn to do
everything in advance. My ability of managing and speaking in public is
also improved.
Speaking of the course itself, I have a different experience of learning.
Unlike just getting knowledge and materials from teachers, I try to search
information online to understand deeper after knowing some very basic
concepts. This is a very new, challenging but benefited learning style for
me Because I can remember these knowledge more deeply than common
teaching style.
In the future, I may be more adaptable because I try a new learning style
this spring and know the importance to deal with some unexpected issues.
I’m also braver than before. However, I still need to learn to be “tougher”
as a leader.
In the end, I really appreciate professor Zhang, professor Dong, professor
Liu and TA for your help.

Self Reflection
黄旖彤 Tiffany
How time flies ! I still can remember the first time I received the message that we had
to do our spring term at home. It was something exciting and a bit of uncertain
grabbed me at first, cause I had no idea how our courses would be like and could I
still learnt as much as at real class. But no sooner then, I discovered that my
microeconomics class was a special curriculum than the normal one, we had more
access to some advanced information and knowledge and our teacher also provided
a new form of class from which I learnt far beyond than before. In the form of group
study, we acquired new knowledge together and came over the difficulties together
cause it was a mixed group, so ,it practiced my oral speaking and my ability to
communicate and stay in others shoes. In these around 4 moths studying travel, I
could be able to get to know my partners deeply and felt staying closer than before
even though we did not see each other. Despite the basic professional knowledge I
gained from the course , the more important thing was I understood deeper of team
cooperation and management. It was my honor to received this advanced education
in China and I felt grateful to have Sunshine and my team partners to engaged in part
of my university life!

Self Reflection
沈芸伊 Amy
This is my first formal contact with economics, and the tension is more than
expected. Of course, it is mainly because of the lack of English ability, and I am
not very confident in studying economics. Fortunately, everything came quite
smoothly. In each teamwork, we have more and more tacit understanding as
well as more and more complementary. However, not everything is perfect.
Often because of the age is not mature enough, the social experience is not
very broad. Sometimes our vision and views are too simple and immature. In
other words, it is a little idealized and not close enough to the facts. Especially
when it comes to the example given by the teacher, I need to make a similar
model myself. For me, it is really a bit difficult to grasp the accuracy. The data
seemed distant and confusing to me. But this semester I have really gained a
lot. Finally, I would like to thank my team leader. She often explained and gave
me guidance when I am confused. My progress is also related to her.

Self Reflection
李佳睿 Carl
First of all, I thank Professor Zhang Luyao very much. She has brought me different
microeconomics classroom experience, combining video, group activities, project
exploration and other forms, which makes me have a strong interest in
microeconomics. It's not the traditional classroom, the traditional teaching method I
imagined. Thank you very much.
Secondly, I would like to talk about my achievements in class. The first is the harvest
of economic theoretical knowledge, which is expected. What surprised me was that
through this semester's Microeconomics course, I got an opportunity to have an in-
depth understanding of blockchain and flash loan. This allows me to keep up with the
trend of the times.
Finally, I would like to talk about practicality. In fact, in my opinion, the help of
microeconomics to me will be profound, lasting and subtle. It can't directly change my
life, but with the knowledge of microeconomics, I can definitely get more benefits in
consumption and investment in the future. Microeconomics is an important angle to
explore the world. The deeper I understand this angle, the deeper I understand the
society. The benefits are intangible but huge.
That's all. Thanks again to Professor Zhang Luyao and the teaching assistants.

Hacking events - flashloan attack: presented by Epiphany

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Hacking events - flashloan attack: presented by Epiphany