Inverse Finance exploited again for $1.2M in flashloan oracle attack
Simply two months after dropping $15.6 million in a worth oracle manipulation exploit, Inverse Finance has once more been hit with a flashloan exploit that noticed the attackers make off with $1.26 million in Tether (USDT) and Wrapped Bitcoin (WBTC).
Inverse Finance is an Ethereum primarily based decentralized finance (DeFi) protocol and a flashloan is a sort of crypto mortgage that’s normally borrowed and returned inside a single transaction. Oracles report exterior pricing data.
The newest exploit labored through the use of a flashloan to govern the value oracle for a liquidity supplier (LP) token utilized by the protocol’s cash market utility. This allowed the attacker to borrow a bigger quantity of the protocol’s stablecoin DOLA than the quantity of collateral they posted, letting them pocket the distinction.
The assault comes simply over two months after an identical April 2 exploit which noticed attackers artificially manipulate collateralized token costs via a worth oracle to empty funds utilizing the inflated costs.
In response to the assault, Inverse Finance briefly paused borrowing and eliminated its DOLA stablecoin from the cash market whereas it investigated the incident, saying no person funds have been in danger.
Inverse has briefly paused borrows following an incident this morning the place DOLA was faraway from our cash market, Frontier. We’re investigating the incident nevertheless no person funds have been taken or have been in danger. We’re investigating and can present extra particulars quickly.
— Inverse+ (@InverseFinance) June 16, 2022
It later confirmed that solely the attacker’s deposited collateral was affected within the incident and solely incurred a debt to itself as a result of stolen DOLA. It inspired the attacker to return the funds in return for a “beneficiant bounty”.
Associated: Attackers loot $5M from Osmosis in LP exploit, $2M returned quickly after
In complete, the attacker’s gained 99,976 USDT and 53.2 WBTC from the assault, swapping them to ETH earlier than sending all of it via the cryptocurrency mixer Twister Money, trying to obfuscate the ill-gotten positive aspects.
The earlier attack in April noticed attackers make off with $15.6 million in ETH, WBTC, YFI and DOLA.
DeFi market Deus Finance suffered from an identical exploit in March, with attackers manipulating a worth pairing inside an oracle resulting in a achieve of 200,000 Dai (DAI) and 1101.8 ETH value over $3 million on the time.
Beanstalk Farms, a credit score primarily based stablecoin protocol misplaced all $182 million value of collateral in a flash mortgage assault attributable to two malicious governance proposals which ultimately drained all funds from the protocol.
How the most recent assault went down
Blockchain safety agency BlockSec analyzed that the attacker borrowed 27,000 WBTC in a flashloan swapping a small quantity to the LP token used to put up collateral in Inverse Finance so customers can borrow crypto belongings.
The remaining WBTC was swapped to USDT, inflicting the value of the attacker’s collateralized LP token to rise considerably within the eyes of the value oracle. With the worth of those LP tokens now value way more as a result of worth rise, the attacker borrowed a bigger quantity than regular of the DOLA stablecoin.
The worth of the DOLA was value far more than the deposited collateral, so the attacker swapped the DOLA to USDT, and the sooner WBTC to USDT swap was reversed to repay the unique flashloan.
