DeFi protocol Platypus Finance suffered another flash loan exploit that resulted in the loss of over $2 million.
Blockchain security company PeckShield was the first to alert the community about the hack on October 12, and shortly after the platform announced it was temporarily suspending all pools. On-chain data also indicates that the perpetrators are specifically targeting the AVAX-sAVAX liquidity pool.
- According to CertiK investigationtwo malicious entities stole approximately $1.3 million of encapsulated AVAX (WAVAX) and approximately $913,000 of liquid packaged AVAX (sAVAX).
- The DeFi protocol has yet to issue a post-mortem and verify the amount of digital assets stolen, but it has revealed that an investigation has been launched into the matter.
“Due to suspicious activity in our protocol, we have taken proactive action by temporarily suspending all pools. Further updates will be communicated to the community in due course. Thank you for your patience and understanding during this time.”
- Platypus is an Automated Market Maker (AMM) protocol running on the Avalanche blockchain, designed primarily for stablecoin exchanges.
- The platform received $3.3 million in funding during a round led by Three Arrows Capital in 2021, which has since declared bankruptcy.
- This is not the first time the protocol has fallen victim to a flash loan attack. In February, Platypus Finance suffered a huge loss of more than $8.5 million.
- During this incident, attackers exploited a vulnerability in the USP solvency verification mechanism of Platypus Finance’s native stablecoin, tricking smart contracts into believing that the USP was fully backed.
- By September, the team behind the DeFi protocol had successfully recovered approximately 61.7% of the initial losses incurred by its liquidity pools during the USP exploit. To further compensate, they gained access to the reserved treasury and began a second phase of recovery on September 26.
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