A hacker exploited the decentralized finance (DeFi) platform Euler Finance early Monday morning and stole round $200 million value of crypto, in keeping with 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 impartial auditors and safety corporations.
Explains SlowMist,
“The attacker used flashloans to deposit funds after which leveraged them twice to set off the liquidation logic, donating the funds to the reserve deal with and conducting a self-liquidation to gather any remaining property.”
The blockchain safety agency notes that the hacker donated funds to the reserve deal with with out being subjected to a liquidity verify, which “created a mechanism that might immediately set off mushy liquidation.”
“When the mushy liquidation logic was triggered by excessive leverage, the yield worth elevated, enabling the liquidator to acquire many 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 mushy liquidation), the liquidator was in a position to efficiently move their well being issue verify (checkLiquidity) and withdraw the obtained funds.”
Based on Lookonchain, Euler misplaced roughly 96,833 ETH, value round $166 million at time of writing, and $34 million value 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 12 months, the best annual whole ever. The hackers made off with a overwhelming majority of that whole by focusing on DeFi protocols.
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