Warp Finance suffered a flash loan attack. According to the team, the attackers lent more funds than they stipulated and siphoned nearly $8 million worth of stablecoins from the platform.
The lending platform tweeted on Thursday night:
“The attacker successfully transferred $7.7 million worth of stablecoins. Our team plans to retrieve approximately $5.5 million that is still in the collateral pool. Once successfully retrieved, these funds will be distributed to users who have experienced losses.”
Warp advised users not to deposit stablecoins earlier last night because it is investigating “violations.”
The agreement was first announced at the end of October, and the platform was officially launched on December 9th-only 8 days later. This is a severe reminder to the DeFi world. In the DeFi world, smart contracts represent banks.
A flash loan attack involves borrowing collateral and then using it to manipulate the price and then returning it in a single transaction. The white hat hacker Emiliano Bonassi reviewed the attack and believed that it actually involved multiple “lightning swaps” in the three liquidity pools on the decentralized trading platform Uniswap-Wrapped BTC, USDC and USDT-and Two loans obtained from the cryptocurrency trading platform dYdX involved Ether and DAI.
The lightning loan attack is the culprit for a series of recent losses in the DeFi protocol, including the $89 million attack on Compound and the $34 million attack on Harvest Finance.
Warp promised to release a more detailed post-mortem analysis in the coming days.
