Cream Finance is Targeted for a Second Flash Loan Attack in 2021, Suffering an $18 Million Loss.
Cream Finance, the Defi lending protocol, has become the target of another flash loan attack, with projected losses of over $18 million. According to early indications from Wu Blockchain, the flaw was used by two attackers to commit the crime in 17 transactions.
Panic Shield, a blockchain security company, and the analytic firm were the first to notice and inform the defi protocol to the attack. They stated that they had identified the source of the attacks and requested that Cream Finance contact them for additional information.
Flash loan assaults are one of the most prevalent types of Defi exploits due to their low cost and ease of execution. The attackers take advantage of uncollateralized loans enforced by smart contracts, which allow users to borrow money without requiring collateral and without imposing a cap on the amount borrowed, as long as the borrower can repay the loan in the same transaction. The majority of traders utilize it to arbitrage the price difference between two separate platforms for an item.
The hackers use the Flash Loan feature by first borrowing a huge sum of collateral and then using it to manipulate the pricing of tokens in the pools. According to reports, the Cream Finance attackers obtained a large amount of $AMP, and then the market crashed, collapsing its price.
The Defi Market exploit appears to be nearing its pinnacle, as there have been about a half-dozen exploits on multiple protocols this month alone. While the largest Defi attacks on PolyNetwork, totaling $610 million, were recovered, the incident demonstrated the vulnerability of funds in these Defi protocols. Since its conception, security has been a primary concern, but despite all precautions, exploits continue to occur.
The US Securities and Exchange Commission is actively seeking to regulate the cryptocurrency market and has teamed with a blockchain security analytics business to assist them in analyzing the enormous sector. Thus, the barrage of attacks could have a detrimental effect on one of the most rapidly rising crypto ecosystems.
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