Rari Capital has become the latest decentralized finance (DeFi) project to be hacked. As a result, the company has lost $11 million.
Rari Capital suffers $11m loss in high-profile exploit
Rari Capital has become the latest DeFi project to suffer an attack at the hands of hackers. The decentralized financial platform revealed yesterday that it suffered a high-profile exploit and that the company lost a huge amount of money in the process.
The DeFi platform disclosed the news in a tweet yesterday. The statement said that “There has been an exploit in the Rari Capital ETH Pool related to our @AlphaFinanceLab integration. The rebalancer has removed all funds from Alpha in response. We are currently investigating the situation, and a full report will be shared once everything is assessed.”
Rari Capital builds products like optimized yield vaults and boutique lending pools. Vaults can harvest, sell and restake digital assets. They also help maximize profits, lower costs, and increase the burning rate. Lending pools are decentralized applications that allow untrusted users to lend and borrow assets.
The hack is regarded as an “evil contract” exploit. It is designed to trick a contract into thinking certain protocols have changed. Thereby, a platform can grant access or permissions to a hostile contract.
According to Alpha Finance, the hackers targetted Rari Capital’s interest-bearing ibETH vault. However, its Alpha’s funds remained safe following the attack. “Funds are SAFE on #AlphaHomora. We are notified that @RariCapital has suffered from an exploit that was due to the incorrect assumption when using HomoraBank contract, as they were setting up an ibETH pool on their platform. #Alpha team is here to help,” the Alpha team tweeted.
Following the attack, the hacker’s wallet held over 4,005 ETH which are worth over $15 million. Since then, the attacker has withdrawn most of the funds. Currently, the wallet currently holds less than 1 ETH.
Crypto platforms still suffer from occasional hacks
Cryptocurrency platforms have lost billions of dollars to hackers over the past decade. Rari Capital’s attack indicates that security should remain a priority for both centralized and decentralized cryptocurrency-focused platforms.
Having said that, most platforms have compensated users who have lost their funds in an attack. However, the Rari Capital team has yet to reveal its plans for dealing with the lost funds. In addition, RGT, Rari’s governance token, has dipped by nearly 20% since the attack. The RGT is currently trading close to $15.
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