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A hacker took advantage of a code vulnerability to extort approximately $455,000 from non-custodial decentralized finance (DeFi) protocol Arcadia Finance.
blockchain explorer peckshield alerted Regarding the hack on Arcadia Finance, the reason cited was a “lack of untrusted input validation”. The code is believed to have lacked a verification mechanism to cross-check unverified inputs. The flaw allowed hackers to collectively withdraw approximately $455,000 in funds from Ethereum (darcWETH) and Optimism (darcUSDC) vaults.
Arcadia Finance has not yet responded to Cointelegraph’s request for comment.
Arcadia Finance confirmed the hack two hours after Peckshield reported it and subsequently put contracts on hold to prevent further losses of funds.
We are aware of potential exploits in our protocol.
We have paused the contracts and are investigating the root cause with security experts. More information will be provided as it becomes available.— Arcadia Finance (@ArcadiaFi) 10 July 2023
While the investigation is ongoing, there is another vulnerability in Arcadia’s code that, if exploited, could prove disastrous for the protocol. According For PeckShield:
“In addition, there is a lack of reentrancy protection, which allows instant liquidation to bypass internal Vault health checks.”
Most of the stolen funds – around 180 ether (ETH) – were, and have been, from Optimism. washed Via TornadoCache. However, the stolen tokens – worth over $103,000 at the time of writing – are parked on Ethereum at a suspicious wallet address.
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In the second quarter of 2023, hacks and exploits in the crypto sector resulted in cumulative losses of over $300 million.
A report from blockchain security company CertiK revealed that a total of 212 security incidents were reported in the quarter, resulting in a loss of $313,566,528 from the Web3 protocol.
When comparing Q2 data to last year, CertiK found that crypto hacks declined by 58%. Of the lots, the BNB chain recorded the most events, with 119 events causing a loss of $70,711,385.
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