Sunday, June 16, 2024

Zunami DeFi Protocol Suffers $2.1 Million Loss in Significant Price Manipulation Assault

Zunami Protocol’s zStables Pool Falls Victim to Price Manipulation Attack, Resulting in Potential Losses Exceeding $2.1 Million.

A price manipulation attack targeting the “zStables” stablecoin pools on Curve Finance has been confirmed by the Decentralized Finance (DeFi) platform, Zunami Protocol. This incident adds to the growing list of vulnerabilities affecting Curve Finance, where funds from various liquidity pools were drained, revealing over $100 million worth of cryptocurrencies at risk.

The perpetrator of the Zunami Protocol’s exploit leveraged a flash loan from Balancer, as observed by blockchain security firm Ironblocks. This hacker injected liquidity to significantly alter the price and initiated trading within Zunami’s exchange. The liquidity was eventually withdrawn, leading to a price change and concluding with the flash loan being returned, resulting in 1,152 ETH acquired.

The swift response of blockchain security platform PeckShield played a crucial role in notifying Zunami Protocol about the attack, prompting immediate “necessary actions.” The attack’s success yielded the attacker more than $2.1 million, exploiting a vulnerability that led to inaccurate price calculations, as highlighted in a PeckShield Tweet.

Further complicating the recovery efforts, the stolen funds were transferred to the coin mixer Tornado Cash by the attacker, obscuring the transaction path and making it challenging to trace and reclaim the stolen assets.

Curve Finance continues to grapple with the aftermath of the exploit and has recently offered a bounty of $1.85 million for identifying the attacker responsible for the losses.

Read Also: Ethereum-Based BTCX Token Raises $1.5M to Build the World’s First Bitcoin Xin Blockchain

Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.

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