Value DeFi Becomes the Latest Victim of A $6 Million Flash Loan Exploit
The decentralized finance yield protocol Value DeFi has become the latest victim of a flash loan exploit in which it has lost approximately $6 million. This exploit took place early morning on Saturday. The hacker carried out a massive flash loan in order to conduct this attack on Value DeFi. Reportedly, the attacker is said to have returned $2 million out of the total exploited funds.
Details over the Flash Loan Attack
Early on November 14, 2020, an attacker whose identity is yet to be known executed the attack on the MultiStables vault of the Value DeFi protocol. For the exploit on Value DeFi, the attacker used a flash loan, an uncollateralized loan option in decentralized finance (DeFi). Flash loans let users borrow easily and instantly without any need to provide collateral.
A flash loan of around 80,000 ETH worth approximately $37 million was taken out by the attacker from the decentralized money market protocol Aave at around 10:45 AM EST on Saturday. Using these funds taken out in a flash loan, the attacker conducted an arbitrage attack on the MultiStables vault of the DeFi protocol and drained millions of dollars from it. As per a tweet from Value DeFi, it has suffered a net loss of $6 million.
“We are currently working on a postmortem and are exploring ways to mitigate the impact on our users,” the protocol added.
When the attacker got the flash loan from the Aave protocol, a developer of Aave Emilio Frangella instantly informed about this massive loan through a tweet.
80.000 eth flashloan on @AaveAave 👀👀 https://t.co/ngnHIoNKpi
— Emilio Frangella (@The3D_) November 14, 2020
This exploit has occurred following the protocol’s Friday tweet in which it claimed to have a prevention methodology for a flash loan attack. After the exploit, the attacker also sent a message that says “do you really know flashloan?” The attacker might have left this message for taunting the Value DeFi protocol. The message was sent to the deployer address of the protocol and a fee of $0.31 worth of ETH was paid by the unknown attacker for sending this message.
Out of the total exploited funds, the attacker has returned $2 million back to the protocol. The remaining funds are still in the control of the attacker.
Value DeFi token’s price is down by 25% following the exploit
Following the exploit, the price value of the native digital token of Value DeFi has decreased down. VALUE has faced a price crash of more than 25 percent during the past 24 hours. The coin’s price has decreased down from $2.73 to $1.98 where it is currently trading. The price of VALUE is still down by -25.33 percent in the last 24 hours, at the time of writing.
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