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 companies.
“The attacker used flashloans to deposit funds after which leveraged them twice to set off the liquidation logic, donating the funds to the reserve tackle and conducting a self-liquidation to gather any remaining property.”
The blockchain safety agency notes that the hacker donated funds to the reserve tackle with out being subjected to a liquidity examine, which “created a mechanism that might immediately set off smooth liquidation.”
“When the smooth liquidation logic was triggered by excessive leverage, the yield worth elevated, enabling the liquidator to acquire many of the collateral funds from the liquidated person’s account by transferring solely a portion of the liabilities to themselves.
On condition that the worth of the collateral funds exceeded the worth of the liabilities (which had been solely partially transferred as a result of smooth liquidation), the liquidator was in a position to efficiently go their well being issue examine (checkLiquidity) and withdraw the obtained funds.”
In keeping with 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 information platform Chainalysis notes that hackers stole a complete of $3.8 billion from cryptocurrency companies final yr, the very best annual complete ever. The hackers made off with a overwhelming majority of that complete by concentrating on DeFi protocols.
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