Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesBotsEarnCopy
Raft Finance floats user bailout plan after odd exploit

Raft Finance floats user bailout plan after odd exploit

BlockworksBlockworks2023/11/14 00:48
By:Blockworks

An attacker stole 1,575 ETH from Raft, then burned 1,570 of it

Raft Finance experienced a severe security breach on Friday when a hacker managed to exploit a vulnerability in the protocol, resulting in the loss of approximately $3.3 million in ether.

The protocol originated as a fork of Liquity that replaced ether with staked ether as the collateral source backing its stablecoin, R. The exploit caused R to deviate from its intended $1 peg.

That prompted the team behind Raft to confirm the vulnerability and pause further minting to prevent additional losses​​​​.

According to a post-mortem blog post published Monday, the attacker was able to mint 6.7 million R, which was then swapped for 1,575 ether ( ETH ) causing R to de-peg.

Read more: Liquity aims to build on safety record with V2 using staked ether

In a surprising turn of events, the attacker then sent 1,570 ETH to a burn address, effectively removing it from circulation. This action left the hacker with only 7 ETH from the stolen funds.

Prior to the attack, the hacker’s address had received 18 ETH through a crypto mixer service, suggesting a level of premeditation and planning for the attack​​​​​​.

The circumstances of this attack are unusual, in that the large majority of the stolen funds were burned, leading to speculation about the attacker’s motives. The loss may have been accidental.

Loading Tweet..
Loading Tweet..

It’s not yet clear what comes next for the protocol and its users. Developers have promised an “in-depth recovery plan this week, outlining the steps to address the situation and provide redress for affected users,” the team said in its post-mortem statement.

“The Raft community will have the opportunity to provide feedback on the proposed recovery plan before it is concluded and the recovery plan is executed,” it said.

Raft issued a governance token (RAFT) in an airdrop on Oct. 11, intended to be staked to provide holders with voting rights over the protocol. The price of RAFT has plummeted about 60% since the exploit, per Coingecko .

Total value locked (TVL) in the protocol peaked in July at $64 million, and has been on a steady decline since, according to DefiLlama — just $1.48 million remains as of today.

Meanwhile, the formerly dollar-pegged stablecoin R is volatile with very limited liquidity on a handful of decentralized exchange markets. Although the developers have suspended the creation of new R tokens, users can still repay their R-related debts to retrieve collateral that is locked in the protocol.

Don’t miss the next big story – join our  free daily newsletter .

Tags
  • ETH
  • exploit
  • mixers
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Locked for new tokens.
APR up to 10%. Always on, always get airdrop.
Lock now!

You may also like

ZA Miner Introduces Free Cloud Mining Platform for Bitcoin and Dogecoin

ZA Miner, a UK-based cloud mining provider, has officially launched a new platform to make cryptocurrency mining more accessible to a broader audience.

DeFi Planet2025/04/25 22:11
ZA Miner Introduces Free Cloud Mining Platform for Bitcoin and Dogecoin

OSC Warns of Surge in AI-Driven Crypto Scams as Canadian Fraud Losses Climb to $640 Million

According to the Globe and Mail report, the Ontario Securities Commission (OSC) is raising red flags over a sharp rise in cryptocurrency fraud across Canada, as scammers now weaponize artificial intelligence to swindle unsuspecting investors.

DeFi Planet2025/04/25 22:11
OSC Warns of Surge in AI-Driven Crypto Scams as Canadian Fraud Losses Climb to $640 Million

Arkansas City Planning Commission Rejects Crypto Mining Proposal Amid Strong Community Backlash

The Vilonia Planning Commission has unanimously turned down a proposed cryptocurrency mining facility within city limits, following weeks of vocal opposition from residents.

DeFi Planet2025/04/25 22:11
Arkansas City Planning Commission Rejects Crypto Mining Proposal Amid Strong Community Backlash