More

    DeFi Hack: Inverse Finance Exploited For The Second Time This Year  

    Ethereum-based lending protocol, Inverse Finance, has witnessed its second hack this year. The DeFi lender was exploited via price oracle manipulation through which, the attacker made a profit of $1.26 million in BTC and USDT.

    In light of this, the hacker misused the balances of assets in the pool to directly calculate the LP token price, further altering the reserves in the pool and facilitating a flash loan attack. The attacker quickly sold the stolen funds via Uniswap, further putting them through Tornado cash.

    The protocol’s official Twitter handle acknowledged the exploit and announced that they are temporarily halting the borrowing services because of the hack. Inverse Finance said its over-collateralized stablecoin DOLA was removed from its money market, Frontier. The DeFi platform tweeted — “We are investigating the incident however no user funds were taken or were at risk. We are investigating and will provide more details soon”.

    According to security firm PeckShieldAlert, the attack was allegedly performed by a bot that front-runs the original hack. 

    Inverse Finance Lost Over $15.5 Million In April

    This was not the first time Inverse Finance suffered a multi-million dollar exploit this year. Earlier this April, the protocol fell prey to its first price manipulation hack and lost $15.6 million in DOLA, ETH, WBTC, and YFI. 

    Even then, the lending protocol took to Twitter, explaining the attack and noted that the attacker used “capital-intensive manipulation of the INV/ETH price oracle on Sushiswap.” This further resulted in “a sharp rise in the price of INV, which subsequently enabled the attacker to borrow $15.6 million”. However, unlike the latest tweet from the protocol, last time they had offered “a generous bounty in exchange for returning the borrowed funds”.

    While the crypto market continues to bleed, both DeFi protocols and Discord servers also continue to suffer more frequent exploits this year. In light of this, security in the crypto industry, along with liquidation issues due to the ongoing bear cycle, has become the top two concerns for investors.

    Palak Malhotra
    Palak is a crypto journalist who focuses on socio-political issues, directly impacting the industry. From Regulatory and Blockchain news to Twitter Wars and Pop-culture influence in crypto, she likes to analyse emerging trends in the market.

    Latest articles

    Newsletter

    Subscribe to our newsletter to get the latest market analysis and news.

    Related articles