Hackers successfully drained funds by exploiting the smart contracts of the defunct decentralized finance (DeFi) lending protocol, Yield Protocol.
Yield Protocol ceased operations in December 2023, citing challenges in meeting business demand and regulatory pressures. Despite multiple warnings, advising investors to close positions, withdraw funds, and settle pending loans, an unknown hacker managed to steal approximately $181,000 worth of crypto assets from Yield’s strategic contracts on the Arbitrum blockchain.
The attack exploited a discrepancy between the pool token balance and total supply, leveraging flash-loaned assets to withdraw extra pool tokens. This discovery was made by blockchain investigation firm PeckShield and later confirmed by CertiK.
Official support for Yield Protocol ended on February 2nd, and while there have been past instances of resurgence, attempts to recover the hacked funds seem improbable. In March 2023, Yield Protocol, along with other DeFi protocols, experienced losses due to an attack on the noncustodial lending protocol Euler Finance. However, Yield Protocol managed to recover fully by July 2023 through collaborative efforts with Euler.
Blockchain security firm Immunefi reported a 23% decrease in losses attributed to hacking and scams in the first quarter of 2024 compared to the same period in 2023. Hacking and fraud incidents accounted for approximately $336.3 million in losses in Q1 2024, down from $437.5 million in Q1 2023.
The report identified 46 hacking incidents and 15 cases of fraudulent activities. Notably, the cross-chain bridge protocol Orbit Bridge suffered the most significant loss at $81.7 million.
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