Cream Finance looks to have incurred a significant loss as a result of the flash loan theft
Malicious actors continue to prey on decentralized financial initiatives. A prominent Defi lending platform experienced a flash loan assault on Wednesday.
Cream Finance, a decentralized lending platform, looks to have been the victim of a major hack on Wednesday, with an attacker taking over $100 million in money through a huge flash loan assault.
PeckShield, a blockchain data analytics business, discovered the flash loan on Wednesday. Cream liquidity provider tokens, as well as other Ethereum-based tokens, were among the monies hacked.
An attacker uses susceptible smart contracts to generate their own arbitrage opportunity during a flash loan attack. Typically, this is accomplished by flooding the contract with their borrowed tokens, so altering the relative value of a trading pair.
As indicated by the $19 million flash loan compromise of the protocol in August, criminals have repeatedly targeted Cream Finance. According to Cointelegraph, the assault was accomplished by a reentrancy issue presented by the Amp cryptocurrency, an Ethereum-based token meant to collateralize digital payments on Flexa. According to industry sources, Cream’s total value locked (TVL) was above $1.5 billion at the time of writing.
Cream Finance’s forums seem to have been disabled during the assault, while the protocol did inform its Twitter followers that the flash loan is under investigation. The Twitter thread is flooded with furious comments regarding Cream’s bad track record with regards to user money security.
While decentralized finance, or Defi, has been touted for its potential to revolutionize conventional banking and increase financial inclusion, the industry’s track record on consumer protection has been dismal. As of Sept. 16, a thorough list of Defi assaults exposes 63 vulnerabilities, with over $1.2 billion in assets stolen, according to CryptoSec. Cream Finance’s most recent scam would be one of the biggest.
Cream Finance’s CREAM token’s value plummeted in response to the announcement, plummeting more than 26% to $115.47.