Blockchain security firm PeckShield raised an alert on Saturday that DeFi protocol Inverse Finance has been exploited with hackers draining around $15 million.
Hi, @InverseFinance, you may want to take a look: https://t.co/KHHWAozWj1
— PeckShield Inc. (@peckshield) April 2, 2022
According to findings by the security firm, the hackers conducted the attack via an oracle bug by manipulating the price of INV, the native token of Inverse Finance, and used the cryptocurrency as a collateral to steal other tokens from the protocol.
The stolen assets include Yearn Finance (YFI), Wrapped Bitcoin (WBTC) and DOLA. The hackers then swapped the tokens for Ether (ETH) on Uniswap before moving the funds to Tornado Cash to avoid traces.
A few hours after the incident, the Inverse Finance team started a Twitter thread, explaining the issue to users.
The manipulation was not a flash loan attack and was un-related to Inverse’s smart contract or front end code. All future borrows on Anchor are temporarily paused. Some additional updates:
— Inverse+ (@InverseFinance) April 2, 2022
The project plans to fully reimburse affected users if the decision passes DAO. Inverse Finance also revealed that it has no plans to mint additional INV tokens in order to repay affected users.
The hack affected the value of INV as the token dropped by 12% to $333.67 in the last 24 hours.
DeFi Hack is on the Rise
As the DeFi space continues to grow significantly in recent times, hackers have turned the sector into their playing ground, stealing billions of dollars from different protocols.
Last August, DeFi protocol PolyNetwork suffered a major hack with hackers carting away $600 million worth of crypto assets.
In January, 2022, hackers drained over $80 Million from Qubit Finance. Coinfomania reported a few days after the Qubit hack that Cross-chain bridge protocol Wormhole suffered a security breach and lost more than $300 million worth of digital assets.
DeFi hacks have continued to increase yearly and seem to be unending. The market accounted for over 76% of all crypto-related hacks last year, which amounted to around $361 million, 2.7x higher than 2020, according to a report by crypto intelligence firm, CipherTrace.
This article was updated to correct the date of the hack
