Decentralized platform Warp Finance has suffered a major hack, as the newly launched company loses $7.7million worth of DAI and USDC stablecoins.
The hacker withdrew the said amount from the platform using a flash credit scheme. The loan scheme allows the users to get short-term loans without collateral as long as the loan is repaid immediately in one block. This is not the first time cybercriminals have used this handy feature to steal funds from platforms this year.
Warp Finance says it will return most of the funds
The team behind Warp Finance have confirmed the incident and advised users to stop placing deposits on the platform until the circumstances are controlled.
🚨 We are investigating irregular stablecoin loans taken out in the last hour, we recommend that you do not deposit anymore stablecoins until we have clarity on the irregularities
— warp.finance (@warpfinance) December 17, 2020
Yesterday evening, the community members noticed irregular activities on the Warp Finance protocol. An unknown user used the flash loan scheme to drain the DAI and USDC vaults of the protocol through multiple transactions.
The hacker utilized a complex scheme to retrieve a value much higher than the collateral limit, making the lender lose money.
The Warp Finance team assured users that the team will replace the majority of the stolen funds and they shouldn’t be worried. The team claims there is about $5.5 million worth of tokens lying around in a collateral vault, and the team plans to use the money to cover the losses.
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