HB Token Exploit Analysis: ~$193K Lost to AMM Reserve Manipulation via Reward Path

Event Overview

Introduction

On April 7, 2026, HB Token on BSC was exploited for roughly $193K USDT. The root cause was a structural flaw in the protocol's reward distribution mechanism. By tightly coupling the reward claim process with live AMM reserve mutations (pair.sync()), the attacker was able to artificially distort the internal spot price and drain the pool.

How the Reward Path Worked

HB Token included a reward proxy (0xcc9d…fdb5) that handled user reward claims through a multi-step process:

• Step 1 — User initiates claimReward() call
• Step 2 — Protocol computes claimable reward amount
• Step 3 — swapBack() is called, moving HB tokens from the LP to the token contract
• Step 4 — pair.sync() is called, committing the new reserve state on-chain
• Step 5 — Reward tokens are transferred to the user and pool state is updated

The Attack

Step 1: Flash Loan & Borrow

The attack began with a 405,231.89 WBNB flash loan from Moolah, collateralized on Venus to borrow 100,000,000 USDT.

Step 2: Pool Manipulation via Large Swap

Using the borrowed USDT, the attacker executed a large swap through PancakeSwap Router:

Step 3: Trigger claimReward()

The attacker called claimReward() through a helper contract. The reward path executed, including the critical swapBack + sync sequence:

function claimReward(address user) external {
    uint256 reward = _computeClaimable(user);  // 612.83 HB
    
    // Critical: swapBack mutates LP before reward delivery
    _swapBackDuringClaim(reward);               // Removes ~200,000 HB from LP
    
    HB.transfer(user, reward);                  // User receives reward
    updatePool();                               // Reads manipulated spot price
}

swapBack transferred 200,000 HB from the LP to the token contract, then called sync(). The resulting reserves became:

Step 4: Price Distortion & Extraction

With the LP now holding virtually 0 HB, the protocol's internal price query returned:

getSwapValueUSDT(1 HB) = 72,168,120.47 USDT
// ~27 billion % deviation from pre-attack price of 0.0026 USDT/HB

The attacker then executed 25 direct swap rounds against the LP, using the claimed HB to extract USDT at the distorted rate, totaling 189,387,742.26 USDT in extraction.

Financial Summary

Root Cause Analysis

Three critical design flaws enabled the exploit:

• Tight Coupling of Reward Distribution and LP Operations — The reward path performed live LP mutations (swapBack + sync) before completing the claim, allowing an attacker to precondition the pool.
• Spot Price Consumption Without Sanity Checks — The protocol read getSwapValueUSDT(1 HB) directly from LP reserves without any reserve deviation checks or TWAP validation.
• No Access Control on Reserve-Critical Operations — swapBack and sync calls were reachable through the public claimReward entry point, requiring no privileged access.

function claimReward(address user) external returns (uint256) {
    uint256 reward = _computeClaimable(user);
    
    // Problem: LP mutation happens before reward delivery
    uint256 cap = HB.contractAmount();           // 200,000 HB
    uint256 buffered = HB.balanceOf(address(this));
    HB.swapBack(cap + buffered);                  // Drains LP
    PAIR.sync();                                  // Commits distortion
    
    HB.transfer(user, reward);                    // 612.83 HB
    
    // Problem: Price read after manipulation
    updatePool(HB.getSwapValueUSDT(1 ether));     // 72M USDT/HB
}

Mitigation

Protocols must decouple reward claims from LP operations. Reward distribution should use dedicated inventory, not live AMM manipulation:

function claimReward(address user) external {
    uint256 reward = _computeClaimable(user);
    _markClaimed(user, reward);
    rewardToken.safeTransfer(user, reward);  // From treasury, not LP
}

Recommendations

Conclusion

The HB Token exploit highlights a critical anti-pattern: reading manipulated spot prices during a state-mutating transaction. To prevent this, protocols must separate reward distribution from live liquidity operations, and replace raw AMM spot pricing with TWAP or robust external oracles.

References

• Attack transaction: https://bscscan.com/tx/0x19671f5781acc3f5e3a869491a880aa9ee894911f4898a43254fa942d71594ed
• Trace analysis: https://app.blocksec.com/phalcon/explorer/tx/bsc/0x19671f5781acc3f5e3a869491a880aa9ee894911f4898a43254fa942d71594ed
• Victim contracts: HB Token (0x5b41af6a9b314ef4d92f6809087740a83d20570a), Reward Proxy (0xcc9dadc6c290f9e12a9805a005aaf3c37f46fdb5), HB (0x86ddbfc6f2e3cf096e80ca79e46042392bd90aef)
• LP Pair: Cake-LP HB/USDT (0x67a63609cf1c317196724666cc39b2da63545a96)