DeFi markets unfazed by latest $500,000 Ethereum hack

DeFi markets unfazed by latest $500,000 Ethereum hack

Decentralized finance markets have remained at their highest levels in terms of total value locked despite a hack over the weekend resulting in the loss of US$500,000 [AU$727,114] in crypto assets.

The DeFi markets are hovering around their all-time high in total value locked into various platforms. That impressive figure currently stands at around $1.63 billion, according to DeFi Pulse.

DeFi has outperformed cryptocurrency markets so far this year with a gain of 140% in TVL while total market capitalization for all crypto assets has only managed a 36% increase since the beginning of 2020.

Over the weekend, it was reported that one of the industry’s most popular platforms, Balancer, was exploited in a vulnerability that netted attackers $500,000 in Ethereum.

According to Balancer, a “flash loan” was taken out in order to engage in multiple token swaps which drained their crypto-asset pools. The hacker then repaid the crypto loan and made off with the digital loot.

An excerpt of Balancer’s official statement reads:

“An incident occurred on Balancer today which allowed an attacker to drain funds from 2 pools that contained tokens with transfer fees,”

It is not the first time the embryonic DeFi ecosystem has been exploited. Earlier this year, almost $1 million in crypto assets was lifted from the bZx protocol in two incidents also using flash loans.

A flash loan is when a hacker exploits a smart contract to borrow crypto assets with no collateral and then pays them back in the same transaction.

DeFi markets appeared to have shrugged off the incident though cryptocurrencies have lost ground over the weekend.

Featured image courtesy of Jack Moreh/Stockvault

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