Researchers say the $24 million exploit in Curve Finance has reduced trust in DeFi.
The DeFi industry has been exposed to many hacks over the past year. However, the most noticed by users was the one in Curve Finance.
Curve Finance hack shattered community trust
Curve Finance’s $24 million liquidity pool exploit has seriously shaken trust in the DeFi ecosystem. The researchers note that institutions may be discouraged from investing capital in DeFi, and any protocol compiled with Vyper is at risk.
This exploit, which occurred over the weekend, was the result of a bug in the Curve Finance protocol’s smart contracts using the Vyper scripting language. Attackers stole $24 million by draining several stablecoin pools using Vyper contracts due to a re-entry vulnerability.
As a result of this event, the Curve DAO token fell by more than 12 percent, indicating a weakening of confidence in DeFi. One of the researchers stated that if a protocol that works without problems is abused, it may lead us to question the security of other blue-chip DeFi protocols.
The significance of the attack was not only limited to millions of dollars in damage, but also attracted attention as it exploited an unexpected vulnerability in the Vyper code. This vulnerability allowed malicious actors to conduct long-term investigations to find an unexpected problem for a large protocol and abuse that protocol.
