Flash Loan Attack on 0VIX Lending Platform Results in $2 Million Loss

0VIX, a lending and borrowing platform on Polygon, has suffered a loss of approximately $2 million due to a flash loan attack. The attack was carried out by an unknown attacker who exploited the protocol by inflating the price of vGHST, which allowed them to borrow a large amount of USD.

According to onchain analytics platform, Arkham, a blockchain analytics platform, the attacker has already moved the USDC to ETH mainnet and swapped it for 757 ETH.

Source: Arkham

Before the attack, 0VIX’s total value locked (TVL) was $6.4 million. However, after the attack, the TVL decreased to $1.7 million as investors quickly withdrew their funds from the protocol.

In response to the attack, 0VIX has paused its POS and zkEVM markets, which includes oToken transfers, minting, and liquidations. While only the POS market has been affected, the zkEVM market has also been paused as a precautionary measure.

The project has taken to Twitter to keep its users informed about the situation. In a recent tweet, 0VIX stated that it is working non-stop on a solution with the broader ecosystem, and more information about the situation and its implications will be posted shortly.

The protocol has also sent a message to the attacker, which read: “We urge the attacker to return the funds to the 0VIX treasury. We have full faith in the broader community to track and pursue the attacker’s assets.”

This incident is the latest in a series of attacks on DeFi platforms. Just a few days ago, Merlin, a decentralized exchange (DEX) built on zkSync, suffered a loss of more than $1.82 million shortly after receiving a code audit from Certik. These attacks highlight the need for DeFi projects to prioritize security and for users to exercise caution when using these platforms.

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