Suddenly in debt because DeFi platform was hacked
Shegenerates, an American crypto player, is in debt of $225,000 because of the hacking of
On Twitter and Telegram and Discord chat channels about cryptocurrencies, many people also said that they were suddenly in debt from a few thousand dollars to several hundred thousand dollars related to decentralized finance platforms DeFi Agave and Hundred Finance. "After just one session, I suddenly got more than 100,000 USD in debt. I was really panicking because it was beyond my ability to pay," Discord account named Dennis wrote.
Agave is an on-chain lending platform Gnosis, a fork of Aave - one of the most popular DeFi protocols today and currently attracting more than $9 billion in deposits from investors, according to analytics website Pulse. Meanwhile, Hundred Finance is a multi-chain lending project and an arm of Compound specializing in open financial applications.
On March 14, Agave and Hundred Finance announced that their systems were attacked in the form of "re-entrancy" fast loans. According to Fortune, typically, verified (KYC) users can use DeFi platforms to get a quick loan of cryptocurrencies, as long as they provide collateral or proof that the loan will be paid back. However, the above platforms have vulnerabilities that allow hackers to penetrate and deploy fake smart contracts. With this contract, crooks can "turn around" to borrow repeatedly with only a single collateral. In the end, they will withdraw all the borrowed money and leave the victims with a huge debt.
According to CoinTelegraph, based on blockchain analysis, the total loss of the two platforms is 2,100 Ethereum, or $5.5 million. The hacker then tries to launder the money through Tornado Cash. However, the site Blockcrypto believes that the damage figure may have exceeded 11 million USD.
"Agave is investigating the exploit on its protocol. Contracts are currently on hold until the situation is resolved," Agave wrote on Twitter. Hundred Finance also announced a system shutdown, but neither of them mentioned compensation for users.