Yearn Finance, a decentralized finance platform, is the latest victim of an attack by hackers. One of the protocol’s lending pools: the DAI v1 lending pool, suffered a loss of about $11 million.
Attacker causes $11 million loss
“We have noticed the v1 yDAI vault has suffered an exploit,” Yearn Finance tweeted on Thursday. The protocol assures users that the situation is currently being looked into. “The exploit has been mitigated. Full report to follow.”
Banteng, a Yearn Finance Developer, took to Twitter on Thursday to reveal further details of the attack. He says that the attacker “got away with $2.8 million,” in addition to the $11 million that was Lost. He also says that “deposit strategies for v1 DAI, TUSD, USDC, USDT vaults” have been made temporarily available.
According to information available, the attack was made possible through an Aave flash loan. Flash loans are quick loans that require no collateral but require the borrower to pay in a specific time. An ethereum address used for the flash loan has been traced. Stani Kulechov, the founder of Aave, explained what happened in a tweet. Over 160 transactions and $ 5,000 worth of ETH gas fees were involved in the attack.
Users of Yearn Finance on Thursday noticed that their funds were missing. In the platform’ Discord and Telegram communities, panic started spreading when more people pointed out their funds were lost. Later, the v1 DAI vault on Yearn’s website showed a huge loss of 1059%.
DeFi Protocol and Flash Loans
The news of the attack also affected Yearn Finance’s native token, YFI. Shortly after the news of the attack was made public, YFI went from $34,000 to $30,000 in minutes, according to CoinGecko.
Yearn Finance is a platform that helps users get the most value for their tokens by generating yields. Funds are put into various pools, which are then used to fund other DeFi platforms. Flash loans are usually used to hack into DeFi platforms as they are much easier to execute. Harvest, Akropolis, Value DeFi, and Origin Protocol are just some of the DeFi platforms that have lost millions to flash loans.