A recent hack in the decentralized finance (DeFi) space allowed an attacker to mint over 1 quadrillion Yearn Tether (yUSDT) from a mere $10,000, according to blockchain security firm PeckShield. The attacker then exchanged the yUSDT for other stablecoins, taking hold of $11.6 million in the process. The stablecoins included 61,000 Pax Dollar (USDP), 1.5 million TrueUSD (TUSD), 1.79 million Binance USD (BUSD), 1.2 million Tether (USDT), 2.58 million USD Coin (USDC), and 3 million Dai (DAI).
PeckShield reported that the hacker has already transferred 1,000 Ether (ETH) to Tornado Cash, a sanctioned cryptocurrency mixer. The blockchain security firm also informed DeFi protocols Aave and Yearn.finance of the situation.
Yearn.finance released a statement after conducting an initial investigation, stating that the issue was limited to iearn, an outdated contract before vaults v1 and v2. The DeFi protocol assured its users that its current contracts and protocols are not affected by the exploit.
Similarly, Aave also confirmed that it is aware of the transaction. The liquidity protocol clarified that the hack did not impact Aave v1, v2 or v3.
While hacks still plague the DeFi space in 2023, the amount of money lost to these incidents has decreased compared with previous years. According to a quarterly report by blockchain security firm CertiK, over $320 million were lost to hacks in the first quarter of 2023. Although this amount is still substantial, it is much lower compared to the first quarter of 2022 when $1.3 billion was lost, and the fourth quarter of 2022 when $950 million was lost to hacks.
Despite the decrease in the amount lost to DeFi hacks, these incidents still serve as a reminder of the importance of security measures in the space. PeckShield’s quick detection of the recent hack and Aave and Yearn.finance’s prompt action in addressing the issue demonstrate that the DeFi space is continuously improving its security measures.
As the DeFi space grows, it is likely that there will be more attempts to exploit vulnerabilities in the system. However, with increased awareness and investment in security measures, the space can continue to thrive and offer innovative solutions to traditional finance.