A hacker exploited the decentralized finance (DeFi) platform Euler Finance early Monday morning and stole round $200 million price of crypto, based on the blockchain safety agency SlowMist.
Euler Finance, a non-custodial lending protocol constructed on Ethereum (ETH), acknowledged the hack on Monday, noting that it was working with regulation enforcement and unbiased auditors and safety companies.
“The attacker used flashloans to deposit funds after which leveraged them twice to set off the liquidation logic, donating the funds to the reserve tackle and conducting a self-liquidation to gather any remaining property.”
The blockchain safety agency notes that the hacker donated funds to the reserve tackle with out being subjected to a liquidity test, which “created a mechanism that would immediately set off gentle liquidation.”
“When the gentle liquidation logic was triggered by excessive leverage, the yield worth elevated, enabling the liquidator to acquire a lot of the collateral funds from the liquidated consumer’s account by transferring solely a portion of the liabilities to themselves.
Provided that the worth of the collateral funds exceeded the worth of the liabilities (which had been solely partially transferred as a result of gentle liquidation), the liquidator was in a position to efficiently go their well being issue test (checkLiquidity) and withdraw the obtained funds.”
In response to Lookonchain, Euler misplaced roughly 96,833 ETH, price round $166 million at time of writing, and $34 million price of the USD-pegged stablecoin DAI.
In its 2023 Crypto Crime Report, blockchain knowledge platform Chainalysis notes that hackers stole a complete of $3.8 billion from cryptocurrency companies final yr, the best annual complete ever. The hackers made off with a overwhelming majority of that complete by concentrating on DeFi protocols.
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