Decentralized Finance Platform Falls Victim to Flash Loan Attack
Radiant Capital, a decentralized finance (defi) platform, has confirmed that it suffered a flash loan attack on January 2. This attack resulted in the platform accumulating bad debt in the WETH market, amounting to about 1.3% of the total protocol TVL. According to blockchain analytics firm Peckshield, the hack caused Radiant Capital to lose $4.5 million worth of digital assets.
Exploiting a Vulnerability in New Markets
Peckshield’s assessment of the hack reveals that the attackers exploited a time window when a new market was activated in a lending market. The firm suggests that this type of attack could have been prevented if the new market was activated with 0% CF (Collateral Factor).
All Markets on Arbitrum Paused as Investigation Begins
In response to the attack, Radiant Capital’s Decentralized Autonomous Organization (DAO) Council has temporarily halted all markets on Arbitrum. The defi platform has initiated an investigation into the incident to determine the extent of the breach.
Solvency Maintained and Steps to Recover Funds
Radiant Capital assures users that the protocol remains solvent despite the attack. The platform is taking remedial measures to re-capitalize the protocol and provide affected users with full access to their deposits. Additionally, a plan will be implemented to protect users at risk of liquidation during the pause period.
Call for Contact and Hopeful Lift of Pause
Radiant Capital urges the hackers behind the attack to establish communication with the defi platform before law enforcement gets involved. The platform aims to lift the pause on user accounts within the next 24 hours, offering relief to affected users.
Hot Take: Radiant Capital Falls Victim to Flash Loan Attack
Radiant Capital, a decentralized finance platform, has suffered a flash loan attack that resulted in significant financial losses. The attack highlights the vulnerability of new markets activated in lending markets, and the potential for exploitation if adequate security measures are not in place. With investigations underway, Radiant Capital seeks to rectify the situation by ensuring solvency and facilitating the recovery of user funds. It also calls for the attackers to cooperate before involving law enforcement. The incident serves as a reminder of the security risks associated with decentralized finance, reinforcing the need for robust security measures in defi platforms.
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