On March 8, 2022, Euler Finance fell victim to a flash loan brilliant contract hack, resulting in approximately $196 million theft. The hacker was able to exploit a vulnerability in Euler Finance’s smart contract and make off with the stolen tokens.
As part of the hack, the attacker moved some of the stolen tokens through the mixing protocol Tornado Cash, transferring 1,000 ETH worth about $1.65 million through the sanctioned Tornado Cash. Before moving the funds to Tornado Cash, the hacker refunded one of the exploit’s victims after they asked for their “life savings” back.
The theft immediately impacted Euler Finance’s native token, EUL. The price of EUL plunged by more than 52% on the day of the exploit and has not recovered from the fall. Euler Finance has yet to state the incident.
Flash loans are a type of unsecured loan offered by decentralized finance (DeFi) protocols that allow users to borrow funds without any collateral. They are typically used for arbitrage opportunities or other short-term trading strategies.
However, due to their unsecured nature, flash loans are vulnerable to hacks and exploits. Hackers, as with Euler Finance, can exploit intelligent contract vulnerabilities to steal funds from flash loans.
This is not the first time a DeFi protocol has fallen victim to a flash loan hack. In 2020, a hacker stole $24 million from Harvest Finance through a flash loan exploit. In 2021, another flash loan hack resulted in the theft of $8 million from Cream Finance.
As the popularity of DeFi protocols continues to grow, we will likely see more flash loan hacks in the future. Investors and users of DeFi protocols should remain vigilant and exercise caution when participating in these platforms.
Euler Finance is not the first project to suffer a significant security breach. Since its inception, the cryptocurrency industry has been plagued with hacks and exploits, with hackers stealing billions of dollars from various platforms. Despite these security incidents, the industry continues to grow and mature, with many companies implementing more robust security measures to protect users’ funds.
However, the fact remains that cryptocurrency platforms are still vulnerable to attacks, and users should always exercise caution when using these platforms. This includes ensuring that they are using strong passwords and two-factor authentication and being careful when interacting with smart contracts and other potentially risky features.
As for Euler Finance, the team has assured its users that it is working to resolve the issue and that the stolen funds will be returned. The team has also promised to conduct a thorough investigation to determine how the attack occurred and to implement additional security measures to prevent future breaches.
The incident again highlighted the need for robust security measures in the cryptocurrency industry. While the industry continues to grow and mature, security remains a critical concern, and companies must take steps to ensure the safety of their users’ funds. Ultimately, it is up to users to take responsibility for their security and exercise caution when using cryptocurrency platforms.