Wise Lending, a prominent Web3 lending application and yield aggregator fell victim to a flash loan attack due to contract vulnerability which resulted in a loss of approximately $464,000. This hacking incident marks it as one of the first significant crypto hacks of 2024 in the DeFi world.
The exploit which was detailed by blockchain security firm PeckShield, exposed a flaw in Wise Lending’s share accounting logic which was manipulated through a precision issue to drain the platform’s funds.
The Flash loan attack
The attacker employed a flash loan attack, a tactic often associated with manipulating oracle prices. In this case, the malefactor targeted an almost empty market within Wise Lending artificially inflating the share price. Once achieved the attacker swiftly borrowed a significant portion of funds from the lending markets capitalizing on the manipulated conditions.
Exploiter’s multi-token loot and massive borrowings
Data from Etherscan reveals a haul that included $9,000 worth of USD Coin (USDC), $2,000 worth of Tether (USDT), $5,000 worth of Dai (DAI), 18.51 Wrapped Ether (WETH) valued at $47,694 along with various tokens linked to Pendle Finance.
The attacker further leveraged the flash loan to borrow 1,110 Lido Staked Ether (stETH) tokens from the Aave (AAVE) lending protocol, totalling around $2.9 million.
Response and Analysis
While initial reports pointed to a new Pendle Finance derivative token as the cause, few blockchain researchers suggested a potential link to a 7% price swing between stETH and ETH within a specific pool possibly triggered by an AAVE v2 stETH flash loan.
Conclusion:
Wise Lending has taken preventive measures, and the broader crypto community is now closely monitoring developments and potential security enhancements following this early 2024 breach.
As the cryptocurrency space faces its significant security breach of the year, Wise Lending’s flash loan exploit highlights the challenges in securing DeFi platforms. It’s a reminder of the need for robust security measures and vigilance in the evolving crypto ecospace.
