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Scam Alert

Avalanche Flash Loan Attack Nets $370,000

September 7, 2022 - Around 2 mins mins to read

According to blockchain cybersecurity company CertiK, a floan loan attack on the Avalanche blockchain resulted in the theft of $370,000 in USDC from a smart contract and multiple liquidity providers.

Avalanche Flash Loan Attack Nets $370,000
Avalanche Flash Loan Attack Nets $370,000

The company stated in a tweet that it believes its decentralized exchange Trader Joe, staking platform Nereus Finance, and automated market maker Curve Finance have all been disrupted.

In a flash loan exploit, a malicious actor often obtains uncollateralized cash through a lending protocol and manipulates the price of an asset to raise its worth. This is an abuse of a smart contracts security.

Due to the nature of a flash loan, after the attacker has successfully arbitraged the asset, they sell back the borrowed funds in the same transaction and keep the profit.

The attack, which took place on Tuesday at 3:26 p.m. ET, was detected by CertiK’s on-chain security software Skynet, which constantly monitors and posts public suspicious smart contract data.

As is typical in most instances utilizing flash loan attacks, the identity of the attacker is still unclear.

Layer-1 smart contract platform Avalanche, developed by Singapore-based Ava Labs

Avalanche Flash Loan Attack Nets $370,000
Avalanche Flash Loan Attack Nets $370,000

Layer-1 smart contract platform Avalanche, developed by Singapore-based Ava Labs, has gained notoriety in recent years after rising to the top 20 cryptocurrencies in terms of market cap.

The Avalanche network, which works with Ethereum, has a decentralized application ecosystem as well as staking initiatives thanks to its proof-of-stake consensus mechanism.

Prior high-profile cryptocurrency heists with flash loans included the third-largest of 2022, in which DeFi dapp Beanstalk lost $182 million.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Annie

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Author

Annie

Championing positive change through finance, I've dedicated over eight years to sustainability and environmental journalism. My passion lies in uncovering companies that make a real difference in the world and guiding investors towards them. My expertise lies in navigating the world of sustainable investing, analyzing ESG (Environmental, Social, and Governance) criteria, and exploring the exciting field of impact investing. "Invest in a better future," I often say. That's the driving force behind my work at Coincu – to empower readers with knowledge and insights to make investment decisions that create a positive impact.