Ethereum-based lending protocol Euler Finance has fallen victim to a flash loan attack that resulted in the theft of approximately $200 million in digital assets from the project.
The damage came from six transactions in Dai (DAI), Wrapped Bitcoin (WBTC), Staked Ether (sETH) and USDC, and was carried out by two attackers, According To crypto analytical firm Meta Celluth.
The company claimed that the attack was related to the deflation attack that took place a month earlier. The attacker used a multichain bridge to transfer funds from BNB Smart Chain (BSC) to Ethereum and launched the attack today.
Euler Finance confirmed the attack in a recent tweet. The project said they are working with the authorities and will provide more details as soon as they have a clearer picture of the incident.
“We are aware and our team is currently working with security professionals and law enforcement,” Euler Finance said in a tweet, “As soon as we have more information, we will release it.”
The nearly $196 million attack has already become the biggest hack of 2023.
Euler Finance, a lending protocol that allows investors to lend and borrow a variety of crypto assets, has gained increasing popularity for offering Liquid Staking Derivatives (LSD) services. LSDs are a relatively new type of token that enables stakers to increase potential returns by unlocking liquidity for staked cryptocurrency such as Ether.
DeFi remains rampant with hacks
Flash Loans allows DeFi users to borrow millions of dollars against zero collateral. It’s not crypto magic or free money: the loan must be repaid before the transaction is finished or the smart contract reverses the transaction – as if the loan never existed. They are a popular way for attackers to gain funds to exploit on decentralized systems.
Earlier this year, Platypus, another DeFi protocol, was hit with an instant loan attack, taking over $8.5 million, However, with the help of some on-chain spies, the project managed to track down the hacker and even recover some of the funds.
The recent hack comes as crypto is rife with exploits and manipulations. As mentioned, the industry about $4 billion in damage The value of digital assets to hacks, frauds, scams and rug pulling in the last year.
Among various forms of illegal activities, hackers accounted for the bulk majority of crypto losses in 2022. More specifically, hackers stole over $3.7 billion, or over 95% of all crypto lost in the year. Fraud, scams, and rug pulling comprised only 4.4% of total losses.