DeFi Project Platypus Finance on Avalanche Ecosystem Hit by $2 Million Attack

By Tsunami 10/12/23 9:15 AM

In another blow to the rapidly expanding world of decentralized finance (DeFi), the Platypus Finance project, part of the Avalanche blockchain ecosystem, has fallen victim to a sophisticated cyber attack, resulting in the loss of approximately $2 million. This marks the second attack on Platypus this year, raising serious concerns about the security measures in place for DeFi platforms built on Avalanche.

Update: total loss >$2m pic.twitter.com/JnJQjn4Aik

— PeckShieldAlert (@PeckShieldAlert) October 12, 2023

The attack on Platypus Finance was executed through a flash loan on the AVAX-sAVAX liquidity pool. The perpetrators exploited vulnerabilities in the DeFi protocol, ultimately resulting in an estimated loss of $2 million. In response to the attack, the project has temporarily suspended all liquidity pools for a thorough investigation. In an official statement, Platypus Finance tweeted, “Due to suspicious activities in our protocol, we have taken the proactive measure of temporarily suspending all pools. Further updates will be communicated to the community in a timely manner. Thank you for your patience and understanding during this time.”

This unfortunate incident marks the second major attack on Platypus Finance in 2023. In February, the project suffered a flash loan attack that led to a loss of $9.1 million. Fortunately, law enforcement authorities in France apprehended the suspected attacker a few days later. Despite the recovery of approximately $4 million, this still leaves a substantial gap of unrecovered funds, accounting for less than 50% of the total loss.

The recurring breaches experienced by Platypus Finance raise significant concerns about the security infrastructure and practices within the Avalanche blockchain ecosystem. Recently, the web3 social network, Stars Arena, also built on the AVAX platform, saw $3 million drained from its coffers. Notably, in a rather unconventional twist, the hacker returned the majority of the stolen funds, retaining only 10% as a “bug bounty.”

The security breaches have cast a shadow on the native token, PTP, which has seen a significant drop in value. Currently, PTP is trading at approximately $0.0124, marking a decline of over 10% in the past 24 hours. Investor confidence in the platform may have been shaken due to these incidents, and further repercussions on the DeFi ecosystem within the Avalanche network may emerge.

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