The latest exploit in Beanstalk Defi protocol is a clear indication that the Flashloan attack should not be considered a feature of Defi protocol, instead, it should be a vulnerability portal.
The first time Defi (Decentralized finance) concept-based project MakerDAO was launched in 2015 but the first timeDbasedsedd crypto exchange system idea came to its origin in 2018. Defi industry completed around more than 3 years but still, these things are associated with huge numbers of hidden vulnerabilities and these are causing the biggest issue for the adoption of Defi protocols because people don’t feel safe to go with such platforms, where chances to lose funds due to hacking attacks remain more. However there are huge chances of hacking risk in Defi but still, there are some significant associated benefits that exist, which bring more users into the Defi ecosystem.
Flash Loan is one of the features of Defi protocols, which provides loan features for crypto Investors without any collateral. Under a high liquidity situation, a clever crypto investor can easily trade & make money across multiple decentralized exchanges without the use of funds because of Flash loans. But this feature associates a vulnerability in itself.
Usually, bad actors manipulate the price of particular assets on exchange to force the Defi platforms to open the portal of forced Flash loans. Such types of forced Flash Loan are known as Flash Loan attacks. In the past, many bad actors stole huge amounts of funds from Defi protocols with the use of this technique. Not only high price difference of a particular token at two different exchanges may be responsible for the critical vulnerability and flash loan but also it may took place because of other related bugs also.
The latest Flashloan attack incident seen in the Defi protocol Beanstalk Farms. Hackers attacked via Flash loan attack and stole around $180 million worth of crypto assets.
Exploit on this Defi protocol took place on 17 April and resulted in several tokens missing and seeing its US dollar-pegged stablecoin drop below the $1 mark.
Crypto & blockchain analytic firm PeckShield shared some important details about this attack and noted that Defi protocol lost around $180 million worth of crypto assets. While hackers successfully grabbed $80 million in this hack attack.
Don’t miss a thing, sign up for our newsletter