The Decentralized Finance Protocol (DeFi) Yearn.finance recorded a drop of more than USD 4,000 after one of its DAI loan pools was emptied of USD 11 million as a result of piracy.
Yearn.finance’s governance token fell sharply by $4,190 last night. Although the price has risen somewhat, it is still below yesterday’s levels. YFI is currently trading around $31,833. It has fallen 2.4% in the last 24 hours, while it has been consistently green for the past week, appreciating nearly 10%.
Following the attack, UniWhales’ DAO account reported strong YFI sales for ETH.
According to DeFi Pulse, the total value of YFI’s blocked yearn has declined by 3.5% since yesterday – from $507.8 million to $490.5 million today.
« We have noticed that the YDAI v1 safe has been under attack. The hack has had mixed success. A full report will follow, » yearn.finance wrote in its tweet last night.
According to a post by Yearn’s lead developer, banteg, the attacker took $2.8 million, while the vault lost $11 million.
Yearn DAI v1 vault got exploited, the attacker got away with $2.8m, the vault lost $11m. Deposits into strategies disabled for v1 DAI, TUSD, USDC, USDT vaults while we investigate. pic.twitter.com/1RWYyyu0d5m
Some commentators believe they have identified the Ethereum (ETH) address in question, through which the vault was emptied using an AAVE flash loan.
Read also: Understanding AAVE, the DeFi ghost protocol
Stani Kulechov, founder and CEO of Aave, described the operation as « a complex feat with more than 160 transactions nested and 8.6 mm of gas used (about 75% of the block), resulting in a loss of 2.7 mm of dollars ».
According to investor Julien Thevenard, the liquidity providers of the Curve Finance lending platform received more than $3 million of the stolen funds.
Although Curve Finance did not comment on this, they said the Yearn team’s response to the incident was « impressive ».
This is a truly impressive incident reaction btw. Gathering all the multisig signers in 10 min is really, really good! https://t.co/5Sg7Fg9AHT
At the time of writing, Friday morning, no further updates have been provided by Yearn Finance.
This is far from being the only exploit targeting the DeFi platforms over the past year. Most recently, an exploit was discovered on the DeFi yCredit protocol launched by Yearn Finance founder André Cronje. However, Cronje warned that yCredit is experimental and can be « economically exploited ».
And millions were lost in multiple attacks last year, such as those on Value DeFi, bzx, Balancer, Akropolis, Harvest Finance, and others.
Meanwhile, CipherTrace, a crypto-intelligence company, recently reported that DeFi related crime is on the rise, and accounted for 73% of all crimes committed within the crypto sector.
By the end of 2020, many industry insiders predicted that attacks on DeFi platforms and protocols – especially new ones – will increase by 2021.
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