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DeFi Lending Protocol, Warp Finance succumbs to $8M in flash loan attack

DeFi Lending Protocol, Warp Finance succumbs to $8M in flash loan attack

In the latest development, DeFi lending protocol Warp Finance notified about a flash loan attack on its platform. The attack results in draining funds worth $8 million. Reportedly, the attacker booked profits ranging from $1 million to $8million in digital assets. Flash loan attacks are frequent in the DeFi scape. Moreover, with Warp Finance, the attacker exploited the protocol’s vulnerabilities following a series of flash loan attacks. As its name suggests, Flash loan is a function in DeFi protocols that allows you to borrow, utilize, and repay the loan all in the same transaction.

Warp Finance is an optimized DeFi lending solution focusing on bringing a new dimension of liquidity to DeFi. It incepted in early November as a protocol that allows lending and borrowing stablecoin loans. Furthermore, the smart contract was reportedly audited by Hacken Club. In an official statement, the company informed about investigating the matter. They said,

“We are investigating irregular stablecoin loans taken out in the last hour, we recommend that you do not deposit anymore stablecoins until we have clarity on the irregularities

Moreover, one of the users also commented on losing 40000 DAI invested in the protocol. Nonetheless, the identification of the attacker remains revealed at the moment. The co-founder of the Marqet Exchange, Emiliano Bonassi, provided his stance on the attack. Accordingly, he mentioned that the second attack employed multiple flash liquidity along with flash swaps via Uniswap and flash loans via dYdX.

With the DeFi boom, DeFi Attacks substantially increased in 2020

This year turned out as both action-packed and tumultuous for the crypto industry. Bitcoin surged high, surpassing its previous potentials whereas DeFi protocols emerged as the victim of various attacks. Several protocols, including Harvest Finance, Balancer, Percent Finance, Compound, Origin Protocol, resulted in draining millions of dollars due to malicious attacks. Moreover, the need for protection infrastructure of DeFi Protocols is very intense due to these attacks’ ongoing occurrences. DeFi rug pulls also led to deeply threatened the novice community resulting in significant losses.

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