One more DeFi protocol hacked, more than $ 7 million were gone

The DeFi Warp Finance protocol has become the next victim of flash loan attacks, with a total loss of more than 7 million USD. The project plans to recover $ 5.5 million and return the assets to affected users.

Warp Finance - a platform that allows users to deposit crypto assets in exchange for stablecoins - described the event as a "complicated flash loan attack". The culprit was able to borrow more than the value of the collateral, which led to the loss of the stablecoin loan fund.

1 / Approximately 2 hours ago, https://t.co/nS5MGArVoP was exploited with a complex flash loan attack which allowed the user to borrow more than their collateral value resulting in a loss of stablecoin lender funds.

- warp.finance (@warpfinance) December 18, 2020

Haker has successfully brought away many different stablecoins worth up to $ 7.7 million. However, Warp Finance's security team stated that they have "plans to recover about $ 5.5 million still secured in the collateral warehouse".

If the restore is successful, the project plans to refund the affected users. As for the remaining amount, about $ 2.2 million, Warp Finance said it will work to compensate those customers in the near future.

The popularity of instant loans has grown massively during the DeFi fever because of its speed and convenience. However, bad actors have used them to carry out countless similar attacks over the past few months.

Previous victims include the protocols: bZx, Balancer, Harvest, Akropolis, and Origin Protocol.

Blockchain analytics firm Glassnode has investigated ways in which flash loan attacks are carried out. They conclude that most of the attacks come from centralized price oracle, manipulated asset prices and "withdrawal from contracts".

DeFi protocols have upgraded their foundations in an effort to fix vulnerabilities. However, as Warp Finance shows, almost projects are DeFi still shows security issues and investors must be aware of the dangers before allocating any investment funds.

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