Exploit: Abracadabra DeFi Protocol Exploited for $13M ETH
Abracadabra, the DeFi lending protocol, has become the latest victim of a significant crypto exploit, losing around $13 million. Initial reports suggest the attack might be connected to vulnerabilities in specific collateral tokens used within the platform.
The alarm was raised by Peckshield, a well-known crypto security audit firm, which pinpointed the breach. The hack resulted in the theft of 6,260 ether (ETH) from Arbitrum, Ethereum’s layer-two network. Interestingly, these stolen funds have since been moved back to the main Ethereum network and are currently sitting in three separate addresses.
Read more: Magic Internet Money loses its sparkle as DeFi platform hacked for $6.5M
After being mentioned in the initial security alerts, GMX, a decentralized perpetual exchange, proactively addressed the situation on X. In a clarifying statement, GMX assured users that their own smart contracts remained secure. Instead, they pointed towards “Abracadabra/Spell cauldrons,” specifically those that “allow for borrowing against certain GM liquidity tokens,” as the potential area of vulnerability.
The investigation into the underlying cause of the exploit is still in progress. However, a key contributor to Abracadabra has indicated a potential link to recent modifications within GMX’s codebase.
Read more: Sifu’s UwU Lend reportedly hacked for $20M, Curve’s Egorov among affected
This latest incident is twice as costly as the previous attack on Abracadabra. Back in January of last year, the platform suffered a $6.5 million loss, which briefly destabilized its Magic Internet Money (MIM) stablecoin, pushing it slightly off its intended dollar value.
Furthermore, the Abracadabra ecosystem has seen related turbulence. Last June, UwU Lend, another lending platform connected to Abracadabra through Michael Patryn (also known as 0xSifu), was targeted by hackers not once, but twice. The repercussions of those UwU Lend attacks eventually triggered a cascade of liquidations for Curve Finance’s founder, Michael Egorov, who held highly leveraged positions backed by his own platform’s governance tokens.
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