{"investigation":{"slug":"sir","entity_name":"SIR (Synthetics Implemented Right)","trust_score":38,"severity_base":null,"score_modifier":0,"confidence":0.82,"status":"published","content_type":"investigation","summary":"SIR (Synthetics Implemented Right), operating as SIR.trading, is an Ethereum-based DeFi protocol offering non-liquidating leveraged tokens and synthetic assets. On March 30, 2025, just 39 days after its February 20 mainnet launch, the protocol's Vault contract was completely drained of its entire $355,000 TVL through an exploit targeting a novel misuse of Ethereum's transient storage (EIP-1153) introduced in the Dencun upgrade. The attacker laundered proceeds through Railgun; the founder publicly pleaded for a partial return of funds; the protocol subsequently relaunched after completing four additional security audits.","sections":[{"content":"SIR (Synthetics Implemented Right) is an Ethereum-based decentralized finance protocol that enables permissionless creation of leveraged synthetic tokens. The protocol issues two paired instruments: APE tokens (leveraged ETF-style positions) and TEA tokens (stable, collateral-bearing counterparts). Unlike traditional leveraged products, SIR was designed to avoid liquidations, funding fees, and volatility decay, using Uniswap v3 as its sole price oracle. The project was conceived as early as July 2021, when founder Xatarrer published an introductory blog post seeking Solidity developers, UI designers, and marketing personnel. Development spanned approximately four years and was financed by roughly $70,000 raised from friends and community members without venture capital backing. The protocol deployed on Ethereum mainnet on February 20, 2025, and grew organically to approximately $400,000 in TVL before the March 30, 2025 exploit. Smart contracts were designed to be non-upgradeable and self-contained, a design choice intended to maximize trustlessness.","heading":"Protocol Overview","sources":[{"url":"https://medium.com/@xatarra/sir-pleased-to-meet-you-32b92f0e6fc7","name":"medium.com","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/defi-protocol-sir-trading-loses-entire-355-k-tvl-exploit","name":"cointelegraph.com","type":"other","credibility":3},{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","credibility":3}],"severity":"medium"},{"content":"On March 30, 2025 at approximately 06:18 UTC, an attacker systematically drained the SIR Vault contract of its entire TVL of approximately $355,000, comprising USDC, WETH, and WBTC. The incident is notable as one of the first documented real-world exploits of Ethereum's transient storage feature (EIP-1153), introduced in the March 2024 Dencun hard fork. The root cause was a logic error in the Vault contract's uniswapV3SwapCallback() function. The contract stored the expected Uniswap V3 pool address in transient storage slot 0x01 for caller authentication. However, within the same transaction, that same slot was later overwritten with the quantity of APE tokens minted, creating a storage collision. The attacker pre-computed a mint amount whose uint256-to-address cast would exactly match a CREATE2-derived vanity address they controlled. By brute-forcing this vanity address (0x00000000001271551295307acc16ba1e7e0d4281) and deploying a malicious contract to it after the storage slot was overwritten, the attacker bypassed the pool address verification check and called the callback function directly. This allowed unauthorized synthetic asset minting and complete vault drainage. The attack was staged: the attacker deployed dummy ERC-20 tokens and created a Uniswap V3 pool with controlled liquidity as early as January 30, 2025, nearly two months before the exploit execution. Key on-chain identifiers: exploiter wallet 0x27defcfa6498f957918f407ed8a58eba2884768c; main attack transaction 0xa05f047ddfdad9126624c4496b5d4a59f961ee7c091e7b4e38cee86f1335736f; victim Vault address 0xb91ae2c8365fd45030aba84a4666c4db074e53e7. The attack was first detected by on-chain security monitors TenArmorAlert and Decurity.","heading":"March 2025 Exploit: Transient Storage Vulnerability","sources":[{"url":"https://research.blockscope.co/sir-protocol-exploit/","name":"research.blockscope.co","type":"other","credibility":3},{"url":"https://defihacklabs.substack.com/p/sir-exploit-355k-loss-vulnerability","name":"defihacklabs.substack.com","type":"other","credibility":3},{"url":"https://blog.solidityscan.com/synthetics-implemented-right-sir-hack-analysis-837d328c4c30","name":"blog.solidityscan.com","type":"other","credibility":3},{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/defi-protocol-sir-trading-loses-entire-355-k-tvl-exploit","name":"cointelegraph.com","type":"other","credibility":3}],"severity":"medium"},{"content":"Prior to its February 20, 2025 mainnet launch, SIR.trading underwent a single security audit conducted by Egis Security in January 2025. That audit identified 3 high-severity, 2 medium-severity, and 2 low-severity issues. The report is publicly available in Egis Security's audit portfolio on GitHub. Founder Xatarrer acknowledged the limited audit coverage, stating: 'We raised around $70k from folks in here which allowed us to do 1 audit which unfortunately wasn't enough.' The vulnerability that was subsequently exploited — improper transient storage reuse in the uniswapV3SwapCallback function — was not identified in the pre-launch audit, suggesting evaluators were unfamiliar with the security implications of EIP-1153 transient storage, a relatively new Ethereum primitive at the time. Security researchers have since noted that transient storage's automatic reset after transaction completion creates non-obvious authentication hazards when slots are reused within a single transaction. Following the exploit and subsequent relaunch, the protocol reportedly completed four additional security audits, with reports made available at www.sir.trading/audits.","heading":"Audit History and Security Posture","sources":[{"url":"https://github.com/Egis-Security/audits/blob/main/README.md","name":"github.com","type":"other","credibility":3},{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","credibility":3},{"url":"https://blog.solidityscan.com/synthetics-implemented-right-sir-hack-analysis-837d328c4c30","name":"blog.solidityscan.com","type":"other","credibility":3},{"url":"https://crypto.news/sir-trading-offers-attacker-100k-bounty-after-losing-entire-tvl-to-exploit/","name":"crypto.news","type":"other","credibility":3}],"severity":"medium"},{"content":"Immediately following the exploit, the attacker converted stolen assets to WETH and routed them through Railgun, an Ethereum privacy protocol, by approximately 06:25 UTC on March 30, 2025. This significantly complicated on-chain tracing and recovery prospects. Founder Xatarrer published an on-chain message to the attacker on March 31, 2025, offering $100,000 — approximately 28% of stolen funds — as a bounty in exchange for the return of the remaining assets. The offer included a pledge of no legal action. Xatarrer publicly framed the appeal in existential terms, stating: 'If you keep 100% of the funds, there is no chance for us to survive.' The team also contacted Railgun directly in an attempt to assist with tracing or blocking the funds. As of available reporting, the attacker did not respond to the bounty offer and the funds were not returned. No law enforcement or regulatory action has been publicly reported in connection with the exploit.","heading":"Fund Recovery Attempts and Attacker Response","sources":[{"url":"https://crypto.news/sir-trading-offers-attacker-100k-bounty-after-losing-entire-tvl-to-exploit/","name":"crypto.news","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/sir-trading-founder-begs-hacker-return-funds-or-wont-survive","name":"cointelegraph.com","type":"other","credibility":3},{"url":"https://research.blockscope.co/sir-protocol-exploit/","name":"research.blockscope.co","type":"other","credibility":3},{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","credibility":3}],"severity":"medium"},{"content":"Despite the complete loss of TVL, the SIR.trading team announced plans to rebuild the protocol following the March 2025 exploit. The team sought auditors willing to work in exchange for token equity rather than cash compensation due to depleted funds. The protocol was subsequently relaunched at app.sir.trading after completing four additional security audits. The relaunch addressed the transient storage vulnerability by revising the authentication logic in the Vault callback function. No public post-mortem timeline or disclosure of the relaunch audit firms has been identified in major crypto publications. The protocol's native SIR token continued trading on decentralized exchanges following the exploit, with price impact from the security incident visible on DEX Screener data.","heading":"Post-Exploit Relaunch","sources":[{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","credibility":3},{"url":"https://crypto.news/sir-trading-offers-attacker-100k-bounty-after-losing-entire-tvl-to-exploit/","name":"crypto.news","type":"other","credibility":3},{"url":"https://dexscreener.com/ethereum/0xd213f59f057d32194592f22850f4f077405f9bc1","name":"dexscreener.com","type":"other","credibility":3}],"severity":"medium"},{"content":"ZachXBT, a pseudonymous blockchain investigator with a documented track record of flagging fraudulent and high-risk crypto entities, is listed as having flagged SIR in the AVOID.NET trust intelligence database. The specific nature of the flagging — whether it pertains to the exploit itself, the post-exploit communications, or other conduct — has not been independently confirmed through a verifiable public post by ZachXBT at the time of this investigation. The exploit was widely covered by on-chain security monitors TenArmorAlert and Decurity, whose alerts on X (formerly Twitter) brought the incident to public attention. ZachXBT's general investigative methodology focuses on identifying theft, rug pulls, and connected-wallet laundering patterns, areas that are directly relevant to the SIR exploit and Railgun fund movement. This section reflects a low-confidence attribution pending a verifiable primary source linking ZachXBT directly to this entity.","heading":"ZachXBT Association","sources":[{"url":"https://en.wikipedia.org/wiki/ZachXBT","name":"en.wikipedia.org","type":"other","credibility":3},{"url":"https://zachxbt.mirror.xyz/","name":"zachxbt.mirror.xyz","type":"other","credibility":3}],"severity":"medium"},{"content":"SIR.trading presents several risk factors relevant to users and liquidity providers. First, the protocol suffered a complete (100%) TVL loss 39 days after mainnet launch, representing one of the fastest time-to-exploit windows in recent DeFi history. Second, the exploit leveraged a novel vulnerability class — transient storage misuse combined with CREATE2 vanity address spoofing — that was not caught by a pre-launch audit, indicating that cutting-edge Ethereum primitives may introduce blind spots in standard audit processes. Third, stolen funds were successfully laundered through Railgun with no recovery, demonstrating that the protocol's users bear full smart contract risk with no restitution mechanism. Fourth, while the post-exploit relaunch included four audits, the team's limited budget, pseudonymous founder, and absence of institutional backing reduce the assurance that recurrence can be prevented. Mitigating factors include the non-upgradeable contract design (limiting admin key risk), transparent on-chain activity, and the founder's public and detailed communication throughout the incident.","heading":"Risk Assessment","sources":[{"url":"https://research.blockscope.co/sir-protocol-exploit/","name":"research.blockscope.co","type":"other","credibility":3},{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","credibility":3},{"url":"https://blog.solidityscan.com/synthetics-implemented-right-sir-hack-analysis-837d328c4c30","name":"blog.solidityscan.com","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/defi-protocol-sir-trading-loses-entire-355-k-tvl-exploit","name":"cointelegraph.com","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2021-07-20","event":"Founder Xatarrer publishes introductory Medium post announcing SIR (Synthetics Implemented Right) and recruiting developers","source":""},{"date":"2025","event":"Egis Security completes pre-launch audit, identifying 3 high, 2 medium, and 2 low severity issues","source":"","date_original":"2025-01-01"},{"date":"2025-01-30","event":"Attacker deploys dummy ERC-20 tokens and creates a Uniswap V3 pool with controlled liquidity in preparation for the exploit","source":""},{"date":"2025-02-20","event":"SIR.trading launches on Ethereum mainnet; TVL begins growing organically toward approximately $400,000","source":""},{"date":"2025-03-30","event":"Attacker exploits transient storage collision in Vault contract's uniswapV3SwapCallback function, draining entire $355,000 TVL; stolen funds laundered through Railgun within minutes; TenArmorAlert and Decurity detect and publicize the attack","source":""},{"date":"2025-03-31","event":"Founder Xatarrer posts on-chain plea to attacker, offering $100,000 (28% of stolen funds) as a bounty in exchange for return of the remainder, pledging no legal action","source":""},{"date":"2025-04","event":"SIR.trading contacts Railgun directly seeking assistance in tracing or recovering stolen funds; attacker does not respond to bounty offer","source":"","date_original":"2025-04-01"},{"date":"2025-04","event":"Protocol team announces intent to rebuild; seeks auditors willing to work for token equity given depleted funds","source":"","date_original":"2025-04-01"},{"date":"2025-09","event":"Protocol reports completion of four additional security audits and announces relaunch at app.sir.trading","source":"","date_original":"2025-09-01"}],"sources_used":[{"url":"https://medium.com/@xatarra/sir-pleased-to-meet-you-32b92f0e6fc7","name":"medium.com","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://cointelegraph.com/news/defi-protocol-sir-trading-loses-entire-355-k-tvl-exploit","name":"cointelegraph.com","type":"other","archive_url":"http://web.archive.org/web/20260726083827/https://cointelegraph.com/news/defi-protocol-sir-trading-loses-entire-355-k-tvl-exploit","credibility":3,"archive_timestamp":"2026-07-26T08:38:27+00:00"},{"url":"https://rekt.news/sirtrading-rekt","name":"rekt.news","type":"other","archive_url":"http://web.archive.org/web/20260503004339/https://rekt.news/sirtrading-rekt","credibility":3,"archive_timestamp":"2026-05-03T00:43:39+00:00"},{"url":"https://research.blockscope.co/sir-protocol-exploit/","name":"research.blockscope.co","type":"other","archive_url":"http://web.archive.org/web/20260609015117/https://research.blockscope.co/sir-protocol-exploit","credibility":3,"archive_timestamp":"2026-06-09T01:51:17+00:00"},{"url":"https://defihacklabs.substack.com/p/sir-exploit-355k-loss-vulnerability","name":"defihacklabs.substack.com","type":"other","archive_url":"http://web.archive.org/web/20260214020144/https://defihacklabs.substack.com/p/sir-exploit-355k-loss-vulnerability","credibility":3,"archive_timestamp":"2026-02-14T02:01:44+00:00"},{"url":"https://blog.solidityscan.com/synthetics-implemented-right-sir-hack-analysis-837d328c4c30","name":"blog.solidityscan.com","type":"other","archive_url":"https://web.archive.org/web/20260829224824/https://blog.solidityscan.com/synthetics-implemented-right-sir-hack-analysis-837d328c4c30/","credibility":3,"archive_timestamp":"2026-08-29T22:48:24+00:00"},{"url":"https://github.com/Egis-Security/audits/blob/main/README.md","name":"github.com","type":"other","archive_url":"https://web.archive.org/web/20260829033214/https://github.com/Egis-Security/audits/blob/main/README.md","credibility":3,"archive_timestamp":"2026-08-29T03:32:14+00:00"},{"url":"https://crypto.news/sir-trading-offers-attacker-100k-bounty-after-losing-entire-tvl-to-exploit/","name":"crypto.news","type":"other","archive_url":"http://web.archive.org/web/20251007000928/https://crypto.news/sir-trading-offers-attacker-100k-bounty-after-losing-entire-tvl-to-exploit/","credibility":3,"archive_timestamp":"2025-10-07T00:09:28+00:00"},{"url":"https://cointelegraph.com/news/sir-trading-founder-begs-hacker-return-funds-or-wont-survive","name":"cointelegraph.com","type":"other","archive_url":"http://web.archive.org/web/20251216053542/https://cointelegraph.com/news/sir-trading-founder-begs-hacker-return-funds-or-wont-survive","credibility":3,"archive_timestamp":"2025-12-16T05:35:42+00:00"},{"url":"https://dexscreener.com/ethereum/0xd213f59f057d32194592f22850f4f077405f9bc1","name":"dexscreener.com","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://en.wikipedia.org/wiki/ZachXBT","name":"en.wikipedia.org","type":"other","archive_url":"http://web.archive.org/web/20260711020137/https://en.wikipedia.org/wiki/ZachXBT","credibility":3,"archive_timestamp":"2026-07-11T02:01:37+00:00"},{"url":"https://zachxbt.mirror.xyz/","name":"zachxbt.mirror.xyz","type":"other","archive_url":"http://web.archive.org/web/20251025091919/https://zachxbt.mirror.xyz/","credibility":3,"archive_timestamp":"2025-10-25T09:19:19+00:00"}],"source_tags":["defillama"],"addresses":[],"reviewed":false,"reviewed_by":null,"model_used":"claude-sonnet-4-6","created_at":"2026-05-04T02:54:24.740343+00:00","updated_at":"2026-08-29T23:26:12.815519+00:00"}}