Defrost Finance Loses $12 Million in Flash Loan Attack

Both versions of Defrost Finance, a decentralized leveraged trading platform built on the Avalanche blockchain, have suffered hacks.

Investors reported losing staked Defrost Finance (MELT) and Avalanche in their MetaMask wallets, and a member of Defrost Finance, Doran, confirmed that Defrost v2 had been subjected to a flash loan attack.

Defrost v2 was shut down while the team looked into the issue, initially believing that Defrost v1 was unaffected.

However, it was later discovered that Defrost v1 was also impacted by the hack. Blockchain investigation firm PeckShield determined that the hacker manipulated LSWUSDC’s share price for a profit of almost $173,000.

Many in the community believe that the hack was actually a rug-pull scheme.

Defrost Finance has advised users to refrain from using the platform until further notice, and an internal team is currently investigating the issue.