Ethereum-based lending protocol Euler Finance has fallen victim to a flash loan attack resulting in around $200 million worth of digital assets stolen from the project.
The losses occurred over six transactions in dai (DAI), wrapped bitcoin (WBTC), staked ether (sETH) and USDC, and were carried out by two attackers, according to crypto analytic firm Meta Seluth.
The company claimed that the attack is related to the deflation attack one month ago. The attacker used a multichain bridge to transfer the funds from the BNB Smart Chain (BSC) to Ethereum and launched the attack today.
Euler Finance confirmed the attack in a recent tweet. The project said they are working with officials and will provide more details as soon as they have a clear picture of what happened.
“We are aware and our team is currently working with security professionals and law enforcement,” Euler Finance said in a tweet. “We will release further information as soon as we have it.”
The attack, estimated at around $196 million, has already become the largest hack of 2023.
Euler Finance, a lending protocol that allows investors to lend and borrow a variety of crypto assets, has found increasing popularity for offering liquid staking derivatives (LSDs) services. LSDs are a relatively new type of token that enable stakers to augment potential returns by unlocking liquidity for staked cryptocurrency, such as Ether.
DeFi Remains Rampant With Hacks
Flash loans allow DeFi users to borrow millions of dollars against zero collateral. This isn’t crypto magic or free money: The loan must be repaid before the transaction ends or the smart contract reverses the transaction – as if the loan never existed. They are a popular way for attackers to gain funds to conduct exploits on decentralized systems.
Just earlier this year, Platypus, another DeFi protocol, was hit with a flash loan attack, draining over $8.5 million. However, with the help of some on-chain sleuths, the project managed to track down the hacker and even recover some funds.
The recent hack comes as crypto remains rife with exploits and manipulations. As reported, the industry lost approximately $4 billion worth of digital assets to hacks, fraud, scams, and rug pulls last year.
Among the various forms of illegal activities, hacks accounted for the bulk majority of crypto losses in 2022. More specifically, hackers stole over $3.7 billion, or more than 95% of all crypto lost in the year. Frauds, scams, and rug pulls comprised only 4.4% of the total losses.
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