- Warp Finance endures a major flash loan attack resulting in the loss of nearly $8M worth of stablecoins
- The team targets to distribute $5.5M, secured in the collateral vault to the loss bearers once the recovery is completed
- Emiliano Bonassi suspects that the flash loan attack involved more than one flash swaps
Warp Finance, a Decentralised Finance (DeFi) lender protocol, announced itself in late October 2020 and was officially inaugurated on December 9, 2020. It enduresd a major flash loan attack resulting in the squandering of approximately $8 Million worth of stablecoins. The attack in no doubt marks a harsh welcome for the protocol in the World of DeFi.
The team behind Decentralised Finance (DeFi) confirmed the flash attack news on Twitter
The exploiters extracted $7.7 Million of stablecoins from the lending protocol, out of which the team targets to recover and distribute $5.5 Million, procured in the collateral vault to the loss bearers after a successful recovery. Further, Warp recommended the users not to deposit any stablecoins as they suspected “irregularities.” The protocol has also assured to publish a detailed post mortem report in the coming future.
Flash Loan Attack and Emiliano Bonassi suspect the involvement of multiple flash swaps
The protocol experienced a mishap because the borrower loaned additional stablecoins than they were permitted to borrow. A flash loan attack entails borrowing collateral and repaying it in a single transaction after utilizing it to manipulate prices. Emiliano Bonassi, a White Hat Hacker, scrutinized the intrusion and said that he suspects the attacks involved multiple “flash swaps” to three liquidity pools on Uniswap-one for Wrapped BTC, USDC, and USDT and two loans from trading platforms dYdX involving Ether and DAI.
Flash Loan attacks can be held responsible for recent losses in the Defi ecosystem
In the present scenario, even the top platforms are not completely secure from the attacks. Flash loan attacks are responsible for a series of losses and damages procured to the companies and people. Recently, Compound faced a harsh flash loan attack where $89 Million worth of stablecoins were extracted. Harvest Finance also had to go through a flash loan attack where nearly $34 Million worth of stablecoins were extracted.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.