Optimism network-based decentralized credit market Exactly Protocol fell victim to a hacking incident on August 18th, resulting in a significant loss of funds. The breach led to a drop in the platform’s total value locked (TVL), causing concern among users and investors.
The attack on Exactly Protocol was first identified by blockchain security firm PechShield, which promptly alerted the protocol and advised users to take necessary precautions. Initial estimates suggested a loss of 4,300 ETH, equivalent to $7.3 million. However, a recent update from De.Fi, a Web3 antivirus platform, revealed that the actual amount drained from the protocol was over 7,160 ETH, valued at nearly $12.04 million.
According to the security firm, the exploitation strategy involved funding an exploiter contract on Ethereum, transferring deposits to the layer-2 blockchain, Optimism, and ultimately bridging the stolen funds back to Ethereum. This incident has raised concerns about the security vulnerabilities of decentralized finance (DeFi) projects and the need for robust security measures.
Exactly Protocol has acknowledged the security issue and temporarily halted its operations to investigate the incident further. In an official statement, the protocol assured users that they can still withdraw their assets. The team is actively working to address the issue and will provide updates as soon as possible.
The impact of the attack on Exactly Protocol is evident in the statistics provided by DeFiLlama. The total value locked in the protocol plummeted from $37 million to $11.74 million, representing a significant decline of almost 70%. This incident highlights the vulnerability of DeFi projects to security breaches and emphasizes the importance of implementing strong security measures to protect users’ funds.
Unfortunately, this hacking incident is not an isolated event in the DeFi sector. Numerous projects have fallen victim to exploitation and security breaches, causing significant financial losses. Recent examples include the hacking of Solana-based DEX Cypher Protocol, where the attackers managed to steal close to $1 million in crypto-assets.
While some stolen funds have been recovered through collaboration with centralized crypto exchanges and private blockchain investigators, not all cases have had a positive outcome. The Zunami Protocol, for instance, suffered losses of over $2 million due to price manipulation facilitated by malicious donations to the protocol.
These incidents serve as a reminder of the risks associated with DeFi investments and the need for users to exercise caution when participating in these platforms. It is crucial for DeFi projects to prioritize security and implement robust measures to safeguard user funds. As the DeFi sector continues to grow, it is imperative that the industry as a whole works towards enhancing security standards and protecting the interests of users and investors.
