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- DeFi Protocol Exploit: $5 million drained from Makina Finance’s stablecoin pool.
- Sophisticated Attack Unveiled: Manipulation of oracle led to significant loss.
- Vulnerabilities Exposed: DeFi’s security challenges revealed after Makina breach.
Makina Finance, a decentralized finance protocol, has fallen victim to a sophisticated exploit, with an estimated $5 million drained from one of its stablecoin pools. CertiK, a blockchain security firm, said the attack was carried out by manipulation of the protocol oracle through a 280 million USDC-0.01% flash loan. This attack was aimed at the DUSD/USDC Curve stablecoin pool located at Makina, which represents the weaknesses of a decentralized platform.
Attack Method and Execution
CertiK in its analysis identified that the attacker borrowed 280 million USDC, with a large part of it 170 million USDC that were used to access the MachineShareOracle in which the pool depends to get the appropriate pricing. The attacker then went ahead to trade 110 million USDC, which emptied around $5 million out of the pool after manipulating the oracle. The damage has been estimated differently by other security companies such as GoPlus Security and PeckShield. The loss reported by GoPlus Security amounted to $5.1 million, and the loss amounted to about $4.13 million worth of Ether by PeckShield.
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After the attack, an MEV builder stole most of the stolen funds that were estimated to be about $4.14 million as reported by CertiK. In spite of the huge financial cost, the staff of Makina Finance has not officially reported the breach in its social media platforms. On Tuesday, the team recognized the reports that were going around and said that it was still checking up the issue. They subsequently confirmed that they had seen the exploit confined to positions in DUSD LP on Curve. Nevertheless, the team has not admitted publicly any direct loss.
The total value locked (TVL) of Makina Finance, that was introduced earlier this year, is now $100.49 million. The protocol provides institutional-level strategy vaults and has been adopted in the DeFi community. Irrespective of the investigation that is still underway, the breach is a harsh reminder of how vulnerable the decentralized finance platforms remain and how they are usually attacked by highly sophisticated individuals who are willing to take advantage of the weak sides of the system.
Vulnerability Exposed in DeFi Protocols: A Growing Concern for the Industry
This attack on Makina Finance fits into a bigger trend in the decentralized finance space, where smart contract and oracle vulnerabilities have become the biggest targets of exploiters. The increase in the DeFi industry puts additional pressure on the necessity of a higher level of security. This adventure also demonstrates the current risk of the use of the decentralized protocols and the necessity of the regular auditing and active security precautions to secure funds of the users.
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