July 16, 2024
DeFi Flash Loan Vulnerability Strikes Platypus, Resulting in $2 Million Loss
Latest Cryptocurrency News

DeFi Flash Loan Vulnerability Strikes Platypus, Resulting in $2 Million Loss

Following the discovery of a flash loan vulnerability on the DeFi platform on Thursday, Platypus, the native StableSwap protocol for Avalanche, shut down all of its pools.

The platform assault was originally reported on by PeckShield, which revealed on Thursday that the vulnerability resulted in losses of more than $2 million.

According to the findings of its research, blockchain security company CertiK said that two attackers had stolen around $1.3 million worth of wrapped AVAX (WAVAX) and about $913,000 worth of liquid-staked AVAX (sAVAX).

Platypus is right now looking into what happened.

“The whole team is working and communicating with different parties to try to recover the funds from the contracts, identify the root cause of this exploit, and trace the identity of the hacker(s) right now. We will share the updates with the community soon,” a moderator stated on the protocol’s Discord channel on Thursday.

The Avalanche blockchain’s Platypus contains an automated market maker (AMM) protocol that was developed primarily for the exchange of stablecoins.

In a fundraising round sponsored by the now-defunct crypto hedge firm Three Arrows Capital (3AC) and Defiance Capital, the protocol raised $3.3 million in December 2021.

In February, a different attack cost the protocol more than $8.5 million.

That event was also a flash loan attack, in which traders instantly borrowed cryptocurrency without posting collateral and then immediately returned it.

In that specific assault, the culprits took advantage of a flaw in the native stable token USP of Platypus, tricking its smart contracts into thinking that USP was fully supported.

The Platypus team has, as of September, recouped around 61.7% of the initial losses sustained by its liquidity pools as a result of the USP exploit.

On September 26, the team announced on X that they had begun a second round of compensation by drawing from a reserve treasury.

In due course, Platypus promised to provide further information on the most recent exploit.

Image: Flickr

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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