As cryptocurrencies have experienced a meteoric rise in adoption over the past few years, so too has the number of scams increased alongside it. The decentralized finance (DeFi) sector has been one of the most exploited in 2021.
Grim Finance, a protocol on the Fantom blockchain, which allows users to stake their liquidity pool tokens (in Grim Vaults) and automatically harvest yields and re-staking rewards, is the latest DeFi protocol on a long list to be exploited.
Grim Finance Suffers $30 Million Hack
On December 18th, Grim Finance announced that it had suffered an advanced hack, and “over $30 million” worth of cryptocurrencies was stolen from its Grim Vaults.
According to Grim Finance, the hacker exploited the protocol’s vault contract through five re-entrancy loops. Using five loops allowed the hacker to fake five additional deposits into a vault while the platform was still processing the first deposit.
Grim Finance has locked all of the vaults and deposited funds in response, as the entire network was considered to be at risk.
The hacker(s) continued transacting on the network until December 19th, moving as much as 1,000,000 FTM on several occasions.
The lack of a re-entrancy guard on the network led to $30 million being siphoned from Grim Finance. This latest Hack means that hackers have now stolen $600 million from DeFi protocols in December 2021 alone.
On the Flipside
- Despite the continuous exploits, DeFi adoption is at an all-time high, with more than $250 billion locked in several DeFi protocols.
Why You Should Care
For mainstream adoption to become a reality, DeFi protocols must solve their security problems. DeFi hacks now account for almost 80% of the entire major hack volumes of the crypto industry.