The world of decentralized finance (DeFi) is continuously experiencing attacks as another DeFi protocol has been hit hard by attackers. The decentralized finance lending protocol Warp Finance is the latest victim that has been exploited in an attack and has lost $7.7 million worth of stablecoins.
To conduct an attack using flash loans seems to have become a norm in the rapidly developing decentralized finance industry. According to DeFi Prime, this exploit of Warp Finance was the flash loan attack. Reportedly, the attack has occurred only one week after the newly-introduced protocol was launched on the 9th of December. In a tweet following the attack, Warp Finance said that the complex flash loan attack let the user borrow over their collateral value which resulted “in a loss of stablecoin lender funds”.
In another tweet, Warp Finance said that the team at the DeFi protocol is planning on recovering an amount of $5.5 million worth of funds which it said is still secured in the collateral vault. Furthermore, Warp Finance claimed that as soon as these funds are recovered successfully, the company will distribute all of these funds among those users who have been affected by the attack in a bid to compensate for their losses.
The company has not disclosed further details regarding how the attack took place neither it has mentioned the names of the stablecoins that have been drained out from the vault. But it has claimed that it will share further details regarding the attack.
Hex Capital’s Nick Chong, however, has shared some details regarding the transaction of the flash loan in a tweet posted on the day of the attack which revealed that USDC and DAI stablecons were exploited. As per the tweet of Chong, an amount of 3.92 million in USDC stablecoin and 3.85 million in DAI stablecoins were lost during this attack. In total, the amount was approximately $7.7 million.
While sharing details regarding this flash loan attack in a series of tweets, Chong said:
“What I immediately find interesting here is that it appears that much of the attacker’s bounty went to fees. There was 3.85m DAI and 3.92m USDC in the Warp contracts. The attacker (seemingly) left with $1 million in ethereum (1,462 ETH).”