DeFi value drained millions of millions in latest flash loan attack

Key points to remember

  • Value DeFi, a crypto-asset-in-return staking protocol, was mined for $ 7.4 million on Saturday morning.
  • An attacker succeeded in this elaborate operation by making a flash loan of 80,000 ETH.
  • The attacker also repaid the protocol $ 2 million during the multi-step process.

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Value DeFi has been exploited for millions of dollars.

An unknown attacker drained funds from Value DeFi’s MultiStables vault using a flash loan, an innovation where DeFi users can borrow funds from a pool without providing collateral and then repay the loan in the same transaction.

Value DeFi Suffers $ 7.4 Million Loss

In today’s attack, the loan was 80,000 ETH, worth around $ 36 million at today’s prices.

In a complex, multi-step process that would typically only be possible among more advanced DeFi users, the attacker ended up withdrawing $ 7.4 million in Dai from the Value DeFi pool.

In a somewhat bold move, they also signed one of the operations with the words “do you really know about flash loan?” Last night, Value DeFi posted a since-deleted tweet about “flash loan prevention.”

Before running away with the funds, the attacker decided to return $ 2 million.

The attacker’s movements can be viewed on Etherscan here.

This is just the latest example of a major flash lending exploit in DeFi. Flash loans have been the subject of much debate within the DeFi community over the past few months, with discussions ongoing as to whether these innovations are a good or a bad tool in the industry.

While some take the “code is the law” side, much of the debate centers on the ethics of emptying swimming pools for millions of people when regular users risk losing the attacks.

Value DeFi announced the exploit on its Discord channel earlier today, saying the team “is currently working on a post-mortem and exploring ways to mitigate the impact on our users.”

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