Market Analysis Report (26 Dec 2022)

Decentralized finance protocol Defrost Finance suffered a $12 million exploit that, according to blockchain security firm Peckshield, which cited “community intel,” could have been a rug pull.

The team behind Defrost said a first attack used a flash loan, a loan taken and repaid within one transaction, to drain funds out of its V2 product. A second, larger attack, used the owner key to exploit V1.

Defrost, which offers leveraged trading on the Avalanche network, didn’t reveal how much was taken. Peckshield’s analysts said the attack used fake collateral together with manipulated pricing.

The total value locked on the protocol peaked at $95 million in February, and stood at about $13 million ahead of the exploit. It has since dropped to less than $95,000. The team behind the protocol has said it’s willing to negotiate with the people behind the attack for a return of users’ funds.

DeFiYield, which provides a security layer for smart contracts and operates a cross-chain digital asset management platform, claimed that it had performed an audit of Defrost Finance one year prior and had identified the smart contract vulnerability that was exploited in the recent hack.

• SEO Powered Content & PR Distribution. Get Amplified Today.
• Platoblockchain. Web3 Metaverse Intelligence. Knowledge Amplified. Access Here.
• Source: https://www.cryptocompare.com/email-updates/daily/2022/dec/26/