Warp Finance Got Hit With An $8 Million Flash Loan Attack: Report

The Defi platform Warp Finance got hit with an $8 million flash loan attack a week after it went live so let’s find out more in today’s crypto news.

Warp Finance had recommended its users not to deposit stablecoins as they were investigating some irregularities on the platform. The protocol announced itself back in October and the platform was launched on December 9 officially, eight days ago and now, Warp Finance got hit with a flash loan attack a week after its launch.

Flash loan attacks involved borrowing collateral and returning it in one single transaction after using it to manipulate the price but white-hat hacker Emiliano Bonassi reviewed the attack and thinks that it involved multiple flash swaps to three liquidity pools on the Uniswap decentralized exchange, one each for Wrapped BTC, USDT and USDC and two loans form crypto trading platform dYdX that involved DAI and ETH.

Taking a look…https://t.co/UzyDETcmur

This is the second attack whish uses multiple flash liquidity,
flash swaps via Uniswap and flash loans via dYdX

We will see very complex things via @AaveAave V2 batch flash loans 🙂 https://t.co/jAjWa3WAi6

— Emiliano Bonassi | emiliano.eth (@emilianobonassi) December 17, 2020

Flash loan attacks were to blame for multiple losses on Defi protocols recently including the $89 million attacks on Compound and the $34 million attack on Harvest finance. Warp however promised to launch a detailed analysis in the upcoming days.

As we recently reported on flash loan attacks, Chainlink co-founder Sergey Nazarov thinks that Flash loan attacks will keep on happening unless DeFi protocols reconsider the way that they obtain data. More than 0 million was lost when the hackers targeted a number of Defi projects and they were able to manipulate the prices and walk away with tons of money because the Defi protocols are getting data from one source.
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The founder of Chainlink Sergey Nazarov thinks that it is crucial for DeFi protocols to change the way that they obtain data in order to prevent these attacks from happening.

Nazarov said that the hackers will continue to come after Defi protocols unless they change the way that they get their price information. He made these comments after the Defi protocols lost more than $100 million in flash loan attacks that attacked Compound, Cheese bank, and Harvest Finance. The projects were subject to oracle exploits where the price of the coins held in the protocols got manipulated. The hackers were able to target a few of these projects because they only relied on Curve Finance’s data on the price of crypto that is held in liquidity pools.