New Free DAO (NFD) Dumps 99% After $1.2M FlashLoan Attack
Another day, another DeFi hack. Decentralised finance (DeFi) protocol New Free DAO has lost $1.25 million in flashloan attacks that caused its native token NFD to crash 99%.
New Free DAO Loses $1.25M in Flash Loan Hack
The New Free DAO hack occurred during the early hours of Thursday and was first spotted by blockchain security company CertiK. The firm noted that the exploiter deployed an unverified contract dubbed “addMember(),” which enabled the function to add itself as a member.
The hacker then used the attacking contract to conduct a flashloan attack on the DeFi protocol. To do that, the attacker first borrowed a large sum of Wrapped BNB (WBNB) from PancakeSwap and swapped them for New Free DAO (NFD) tokens before transferring the NFD to the attacking contract to earn rewards.
After obtaining the rewards, the hackers converted the NFD tokens back to WBNB, repaid the loan to PancakeSwap, and kept the profit, which amounted to an estimated 4,481 WBNB worth about $1.25 million.
CertiK confirmed that the hacker had started sending the funds to the sanctioned crypto mixer Tornado Cash via different transactions. About 400 BNB ($111k) has been transferred to the mixer so far.
The security firm further noted that the New Free DAO attacker has connections to another flash loan hack that stole 930 BNB four months ago.
Flash Loan Attacks On The Rise
Recently, there has been a significant rise in the number of flashloan attacks. CryptoSavingExpert reported yesterday that hackers syphoned over $370,000 in USDC from several DeFi projects on the Avalanche ecosystem in a flash loan hack. The affected protocols include decentralised exchange (DEX) Trader Joe, staking platform Nereus Finance, and automated market maker (AMM) Curve Finance.
Last month, Solana-based DeFi protocol Crema Finance lost $8.7 million to a flash loan hack. Although the attackers returned $7.6 million and kept $1.6 million, the incident was recorded as Solana’s first flash loan attack.
~ By William A. Frederick ~
