Hackers Drain $370K From Avalanche in Flash Loan Exploit
Smart contracts blockchain network, Avalanche, has recently fallen victim to a flash loan attack, with the attackers stealing USDC worth over $370,000 from several major DeFi projects on the network.
The exploit occurred around 3:26 p.m. ET and was first spotted by Skynet, an on-chain security tool from the blockchain cyber security firm, CertiK. Skynet actively monitors and displays suspicious smart contract data online.
What are Flash Loan Attacks?
Flash loan attacks are a form of exploit that abuses a smart contract’s security whereby criminals borrow a huge sum of uncollateralised funds from a lending platform and manipulate the price of a borrowed crypto asset.
This action drives up the asset’s value, and the borrower immediately sells it and pays the price difference. Flash loan attacks can occur in seconds and involve four or more DeFi protocols.
Over $370k Stolen from Avalanche
According to CertiK, the latest attack on the Avalanche blockchain led to the loss of $370,000 worth of USDC from a smart contract and several other liquidity providers.
The security firm noted that the attack had affected several popular DeFi projects, including the decentralised exchange (DEX) Trader Joe, staking platform Nereus Finance, and automated market maker (AMM) Curve Finance. Like numerous other flash loan attacks, the identity of the criminals is yet to be uncovered.
The latest development comes as Avalanche faces a significant backlash after a whistleblower revealed news of Ava Labs’ alleged market manipulation by filing lawsuits against competitors.
The Ethereum-compatible blockchain network recently rose to fame, equipped with an ecosystem of decentralised applications and staking initiatives. Avalanche is currently one of the most prominent blockchains and its native token, AVAX, is among the top 20 cryptocurrencies in the market.
Flash Loan Attacks on the Rise
Meanwhile, flash loan attacks have played a role in some of the biggest DeFi hacks, increasing investors’ scepticism about the DeFi space.
In July, the Solana ecosystem recorded its first flash loan attack after hackers stole $8.7 million worth of assets from DeFi Protocol Crema Finance. Shortly after, Nirvana, another Solana-based protocol, lost $3.5 million to exploiters in a similar attack.
~ By William A. Frederick ~
