Decentralized finance (DeFi) platform Warp Finance was exploited for $8 million Thursday evening, possibly due to a flash loan attack, according to analysis portal DeFi Prime.
- The exploit appears to be a flash loan attack, DeFi Prime said, citing data from Etherscan. The scheme has become common in the fast-growing DeFi sector.
- Flash loans allow users to borrow funds without collateralization because the lender expects the funds would be returned instantly.
- Warp Finance, which enables users to deposit crypto tokens in exchange for stablecoin loans, said in a tweet it was experiencing problems.
- "We are investigating irregular stablecoin loans taken out in the last hour, we recommend that you do not deposit anymore stablecoins until we have clarity on the irregularities," the platform tweeted.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.