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Warp Attacked by Flash Loan, Hitting Millions

Warp finance encountered a flash loan attack. The attacker has been able to draw almost $8M worth of stablecoins from the platform by borrowing more than they were allowed to.

Last Tuesday evening, they tweeted, “The exploiter was able to remove $7.7M of stablecoins, the team has a plan to recover approximately $5.5M that is still secured in the collateral vault. Upon successful recovery, these will be distributed to users who experienced a loss.”

Warp recommended that users not deposit stablecoins as it investigated irregularities.

The protocol publicized itself at the end of October, and it was officially launched on December 9, making it a short introduction to the world of DeFi, where smart contracts stand-in for banks.

A flash loan attack involves borrowing collateral and returning it in a single transaction after using it to manipulate a price. Emiliano Bonassi, a white hacker, reviewed the attack and assumed it involved multiple flash swaps to three liquidity pools on decentralized exchange Uniswap and two loans from crypto trading platform dYdX involving Ether and DAI.

Flash loan attacks are the culprit for a series of recent losses on Defi protocols, involving an $89M attack on Compound and a $34M attack on Harvest Finance.

Warp will publish an update and more details in the next few days.

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