Euler Finance, a decentralized lending protocol, was hit by a flash loan attack, resulting in a loss of $197 million. The attack took place at 4:50 am ET, and the perpetrator drained $136 million of staked ether (stETH), $34 million of USDC, $19 million of wrapped bitcoin (WBTC), and $8.7 million of DAI.
The security firms BlockSec and PeckShield were the first to report the incident. Euler Labs, the developer of the protocol, has stated that it is working with security professionals and law enforcement and will release more information soon.
Flash loans are a popular tool for attackers looking to exploit vulnerabilities in DeFi protocols. They allow borrowers to access large amounts of funds without providing collateral, but they come with a high level of risk since the borrower must repay the loan within a short time frame.
Euler Finance is a non-custodial protocol that enables users to lend and borrow crypto assets and is run by a decentralized autonomous organization (DAO). The protocol raised a $32 million fundraising round led by Haun Ventures in June 2022.
The attack caused the price of the Euler (EUL) token to plummet more than 45%, falling from $6.10 to $3.30. The incident highlights the risks associated with decentralized finance protocols, and it’s a wake-up call for developers and investors alike.
The Euler Finance team assured users that their funds are safe, and they are taking steps to prevent similar incidents from happening in the future. However, the attack raises questions about the security of DeFi protocols and the need for better risk management measures.