Decentralized finance (DeFi) protocol yearn.finance‘s YFI dropped more than USD 4,000 after one of its DAI lending pools was drained of USD 11m in an exploit.
Yearn’s YFI governance token saw an abrupt USD 4,190 drop last night. Though the price has increased somewhat, it’s still lower than yesterday’s levels. YFI is currently (8:55 UTC) trading at USD 32,634. It dropped 2.4% in the last 24 hours, while it’s still green in a week, appreciating nearly 10%.
Following the attack, UniWhales DAO account started reporting large sales of YFI for ETH.
According to DeFi Pulse, Yearn’s total value locked saw a 3.5% drop since yesterday – from USD 507.8m to the current USD 490.5m.
“We have noticed the v1 yDAI vault has suffered an exploit. The exploit has been mitigated. Full report to follow,” wrote yearn.finance in their tweet last night.
Per a post from Yearn’s core developer, banteg, the attacker took USD 2.8m, while the vault lost USD 11m.
Yearn DAI v1 vault got exploited, the attacker got away with $2.8m, the vault lost $11m. Deposits into strategies disabled for v1 DAI, TUSD, USDC, USDT vaults while we investigate. pic.twitter.com/1RWYyu0d5m
— banteg (@bantg) February 4, 2021
Some commenters think they may have identified the Ethereum (ETH) address in question, per which the vault was drained by using an AAVE flash loan.
Aave founder and CEO Stani Kulechov described this as a “complex exploit with over 160 nested transactions transactions and 8,6 mm gas used (around 75% of the block) resulted to 2.7 mm USD loss.”
Furthermore, according to investor Julien Thevenard, liquidity providers on lending platform Curve Finance received over 3m of the stolen funds.
While Curve Finance didn’t comment on that, they said the Yearn team’s reaction to the incident was “impressive.”
This is a truly impressive incident reaction btw. Gathering all the multisig signers in 10 min is really, really good! https://t.co/5Sg7Fg9AHT
— Curve Finance (@CurveFinance) February 5, 2021
At the time of the writing Friday morning, no further updates have been provided from Yearn Finance.
This is far from the only exploit targeting DeFi platforms in the past year. Just recently, an exploit has been reportedly discovered on DeFi protocol yCredit launched by Yearn Finance Founder Andre Cronje. He did, however, warn that yCredit is experimental and can be “economically exploited.”
And millions were lost in multiple attacks last year, such as those on Value DeFi, bzx, Balancer, Akropolis, Harvest Finance, and others.
Meanwhile, CipherTrace, a crypto intelligence firm, recently said that DeFi-related crime is on the rise, and claimed that fraud still accounted for a whopping 73% of all crypto crime.
At the end of last year, industry insiders predicted that attacks on DeFi platforms and protocols — particularly new ones — will rise in 2021.
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