DeFi protocol Indexed Finance become the latest victim of an exploit that losing around $16 million
The DeFi protocol Indexed Finance became the latest attack victim, resulting in a significant loss. This is the first time this project has been attacked since implementing the protocol in December, costing about $16 million.
Indexed Attack Post-Mortem:https://t.co/ASWB8PlcU0
— Indexed Finance (@ndxfi) October 15, 2021
Indexed Finance suffers $16 million loss in latest DeFi exploit
For more information, Indexed Finance is a project that provides portfolio management features. And two of the project’s indexes, DEFI5 and CC10, were targeted in this sophisticated attack.
The attacker took advantage of the DEFI5 pool rebalancing mechanism by taking $156 million from the pool’s tokens such as UNI, AAVE, COMP, CRV, MKR, and SNX. They manipulated the pool’s weight by adding a new SUSHI token to control most of its weight.
The contract contains malicious code that uses all borrowed assets to buy UNIs from the pool into several parts. The attacker has updated the minimum balance on the controller, and since the UNI has been removed, it is calculated in SUSHI.
The previously purchased UNIs are then used to mint the new DEFI5, resulting in an inflated pool supply due to large orders. At this point, the borrowed amount of SUSHI allows the attacker to earn more DEFI5 at an extremely high valuation. This process is repeated several times before moving on to perform the same attack on the CC10 pool before fast loan repayment.
Security firm PeckShield reported that the attacker stole 15 ETH, 226,900 UNI, 7,500 AAVE, 6,400 COMP, 845,800 CRV, 516 MKR, 45,400 SNX, 33,200 LINK, 5,200 YFI, 17,800 UMA, and 131,600 BAT. Total value is about $16 million.
Indexed announced it would discuss chargebacks and suggest a maintenance plan with the community while patching the security hole is completed.
Unsurprisingly, the project’s native token, NDX, dropped 27%, from $3.35 to $2.43. NDX has continuously kept its price stable from $2.5 to $4 for the past three months. And it is now down 91% from its February 4 all-time high of $27.71.
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