The world of decentralized finance (DeFi) remains in turmoil. On August 18th, a leading player in this field, Exactly Protocol, experienced a staggering security breach. This cyber intrusion led to a dramatic nosedive in its total value locked (TVL), casting doubt over the platform’s resilience.
Exactly Protocol Suffers A Sharp Plunge
In the aftermath of the attack, Exactly Protocol’s native token, EXA, witnessed a decline of over 27% within 24 hours. Consequently, operations on the platform were temporarily suspended, sparking concerns among stakeholders.
PeckShield, a renowned blockchain security firm, was the first to sound the alarm bells. They urgently informed Exactly Protocol about the potential breach, cautioning users to be vigilant and act promptly. Initial reports suggested damages amounting to 4,300 ETH or approximately $7.3 million.
Follow CryptoMode on Twitter, Youtube and TikTok for news updates! However, a subsequent assessment by De.Fi, a premier Web3 antivirus entity, unveiled a more alarming figure. The amount siphoned off was over 7,160 ETH, translating to a staggering $12.04 million.
Understanding the Exploitation Method
Diving deeper into the nature of this breach, PeckShield shed light on the perpetrator’s modus operandi. The malefactors started by funneling funds into a deceitful contract on Ethereum. This was then shifted to the layer-2 blockchain, Optimism.
The final move involved transferring these ill-gotten gains back to the Ethereum platform.
While Exactly Protocol has not officially acknowledged the attack, they did recognize an ongoing security probe. They assured the community:
“We’re diligently probing a security concern within our framework. For the safety of our users, operations have been momentarily halted. However, withdrawals remain functional. We’re addressing this with utmost urgency and will provide further insights soon.”
The Bigger DeFi Picture
Data from DeFiLlama offers a clearer picture of the damage magnitude. Post-breach, Exactly Protocol’s total value locked spiraled down from $37 million to $11.74 million. This sharp drop of nearly 70% underscores the vulnerability even leading DeFi platforms face.
Yet, Exactly Protocol isn’t alone. A string of exploitations has marred the DeFi space. Solana’s DEX Cypher Protocol fell victim earlier this month, losing almost $1 million in assets.
Over half of the pilfered funds were successfully frozen in the Cipher Protocol incident. This recovery was possible thanks to the concerted efforts of centralized crypto exchanges and private blockchain sleuths. Moreover, law enforcement agencies have issued seizure warrants to further clamp down on such activities.
Despite these success stories, the DeFi arena has ample unfortunate endings. Zunami Protocol, another DeFi initiative, recently reported a loss exceeding $2 million. This loss was orchestrated through a price manipulation scheme enabled by malicious contributions to the platform.
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