Another hack in the DeFi market and the theft of $ 7.7 million … details here
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Answer Another hack in the DeFi market and the theft of $ 7.7 million … details here
The decentralized finance (DeFi) space continues to be subject to hacking attacks, and the latest victim is the Warp Finance project.
He confessed Earlier today, the developers reported that a group of anonymous hackers breached the protocol and obtained nearly $8 million through an attack targeting the Quick Loan feature.
Another DeFi market hack and $7.7 million theft:
The exponential growth of the DeFi space has attracted billions of dollars in various decentralized protocols, which in turn have attracted the attention of bad actors.
The platform in the Warp Finance project enables users to deposit cryptocurrencies in exchange for stablecoins and enables decentralized borrowing.
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1/ about 2 hours ago, It was exploited with a complex fast loan attack that allowed the user to borrow more than the value of their collateral which resulted in the stablecoin lender losing money.
– warp.finance (@warpfinance) December 18, 2020
According to the project management, which described the events as a complex attack targeting the express loan.
The offender managed to borrow more than the value of the collateral, which resulted in the stablecoin lenders losing money.
The attacker managed to withdraw $7.7 million from various stablecoins.
Warp Finance’s security team has claimed that it has a plan to recover approximately $5.5 million that is still secured in the collateral fund.
If the recovery is successful, the project plans to return the funds to the affected users.
For the remaining amount of about $2.2 million, Warp Finance said it would work to compensate these users over time.
Quick loans and their weaknesses:
Traditional crypto loans require users to provide some type of collateral, usually from crypto assets, while express loans work differently.
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Users can borrow quickly without providing any collateral because the lender expects to return the money immediately (within the same block).
If the borrower fails to do so, the contract will be void as if it did not exist.
The popularity of fast loans has grown exponentially during the DeFi craze due to speed and convenience.
However, the feature has been used by many bad actors in the past several months.
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Previous victims include bZx, Balancer, Harvest, Akropolis and Origin Protocol.
Glassnode, a blockchain analytics firm, has investigated the possible reasons behind the increasing number of flash loan attacks.
It concluded that most malicious attacks come from central price oracles, and manipulated cryptocurrency prices.
Several DeFi projects have upgraded their protocols in an effort to combat vulnerabilities.
But after the recent attack on the “Warp Finance” project, the weaknesses seem to still exist and investors should be aware of the risks before investing in these risky projects.
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