DeFi protocol Platypus suffers second flash loan attack in 9 months

CertiK estimates the protocol has lost $1.3 million worth of wrapped AVAX and about $913,000 in liquid staked AVAX

article-image

Daniel Eskridge/Shutterstock, modified by Blockworks

share

Platypus, the Avalanche-native StableSwap protocol, suspended all of its pools on Thursday after detecting a flash loan exploit on the DeFi platform.

PeckShield, the first to report on the platform attack, disclosed on Thursday that the exploit led to losses exceeding $2 million.

Blockchain security firm CertiK laid out the results of its own investigation, saying that two attackers had taken about $1.3 million worth of wrapped AVAX (WAVAX) and about $913,000 in liquid staked AVAX (sAVAX).

Playtypus is currently investigating what went down.

Loading Tweet..

“The whole team is working & communicating with different parties to try to recover the funds from the contracts, identify the root cause of this exploit, and trace the identity of the hacker(s) right now. We will share the updates with the community soon,” a moderator wrote on the protocol’s Discord channel on Thursday.

Platypus is an automated market maker (AMM) protocol within the Avalanche blockchain, created with the primary goal of exchanging stablecoins.

The protocol raised $3.3 million in Dec. 2021 in a funding round led by now defunct crypto hedge fund Three Arrows Capital (3AC) and Defiance Capital.

The protocol suffered a separate exploit in February, losing more than $8.5 million. 

That incident was also a flash loan attack — where traders can instantaneously borrow cryptocurrencies without providing collateral and return them within the same transaction.

In that particular attack, the perpetrators exploited a vulnerability in Platypus’ native stabletoken’s USP solvency check mechanism, deceiving its smart contracts into believing that USP was completely backed.

As of September, the Platypus team recovered about 61.7% of the original losses incurred by its liquidity pools during the USP exploit. 

They tapped into a reserved treasury to initiate a second phase of compensation on Sept. 26, the team said on X.

Platypus said it would share additional updates on the latest exploit in time.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495B in value locked, doubling Uniswap's Base deployment.

article-image

The former Valkyrie CEO chats with Blockworks about what she has her eye on as Cypherpunk Holdings’ new leader

article-image

Thursday’s CPI report shows prices are coming down more quickly than analysts had anticipated, renewing hope that central bankers will cut rates in the fall

article-image

If we tokenize all assets in a speculative rush, the risk of creating illiquid markets and trapped value will manifest on a large scale

article-image

Plus, Trump is headed to the heart of Bitcoinlandia with a speaking appearance at the Bitcoin 2024 conference

article-image

Meanwhile, stocks rally after Jerome Powell finishes his Capitol Hill tour

article-image

Plus, Blinks have reshaped many people’s understanding of what blockchains are capable of