Defrost Finance Attacked By Flash Loan Leads To $12 Million Loss

Key Points:

• Defrost Finance disclosed that a hack is being looked at for both of its versions, Defrost v1 and Defrost v2.
• PeckShield discovered that the hacker increased his or her profit by about $173,000 by manipulating the share price of LSWUSDC.
• Defrost Finance’s management has announced an offer to hackers in the most recent developments and is prepared to settle with the attackers.

The Avalanche blockchain-based decentralized leveraged trading platform Defrost Finance said that both of its versions, Defrost v1 and Defrost v2, are under investigation for hacking.

Investors had reported losing their staked Defrost Finance (MELT) and Avalanche tokens from their MetaMask wallets when the announcement was made.

Defrost Finance initiated an investigation into a potential attack on its Defrost v1 and v2 platforms after a few users complained about substantial losses in their accounts.

The platform chose to shut down Defrost v2 while it conducted additional research because it first thought Defrost v1 had not been affected by the breach. One of the core team members, Doran, warned the users not to utilize Defrost v2 over Telegram.

Defrost Finance likewise made a notice via Doran, stating that their Defrost v1 was also under attack and advising users to withdraw money from the protocol to prevent future losses.

PerkShield’s preliminary study revealed an exploit that could be used by manipulating the flash loan and deposit functions and was made possible by the absence of a reentrancy lock. The hacker used the option to change the share price of LSWUSDC. The hacker had made almost $173,000 at the time.

Further investigation revealed that the hacker created a face collateral token and employed a fraudulent pricing oracle to liquidate platform users. The hack is thought to have cost more than $12 million in losses.

A vital component of the platform is being held by the attackers, necessitating fast action that might prevent more damage. Defrost Finance’s management has announced an offer to hackers in the most recent developments and is prepared to settle with the attackers.

Avalanche blockchain-based Defrost Finance is a completely fair launch trading platform. As an internal team looks into and attempts to address the problem, the company has asked its investors to avoid utilizing its platform.

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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