Hackers Steal $5.8 Million from DeFi Lending Protocol Lodestar Finance in Flash Loan Exploit

Arbitrum-based lending protocol, Lodestar Finance has been drained of $5.8 million in a flash loan attack.

Hackers Steal $5.8 Million from DeFi Lending Protocol, Lodestar Finance in Flash Loan Exploit

Lodestar Finance, a lending protocol based on the Arbitrum blockchain, was exploited in a flash loan attack on December 10th, leading to the theft of over $5.8 million worth of GLP tokens.

Lodestar Finance Exploited for $5.8 Million

On December 10th, Lodestar Finance reported that an attacker had inflated the value of the plvGLP token on PlutusDAO (to 1.83) and then used that token to borrow the available supply of liquidity on the network.

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Lodestar explained the hacker earned over $3 million from the โ€œfunds stolen on Lodestar โ€“ less the GLP they destroyed.โ€ Even after the hack, there were โ€œmany plvGLP holdersโ€ who โ€œalso got 1.83 GLP per plvGLP.”

According to the report, the hacker cashed out about $5.8 million. However, the team has recovered $2.8 million of the GLP, which should be utilized to repay depositors following the hack.ย 

A Wave of DeFi Hacksย 

Although PlutusDAO has explained that only Lodestarโ€™s oracle implementation was responsible for the vulnerability, the attacks further increase the bounty cybercriminals have earned from decentralized finance.

In 2022, more than $4.5 billion was stolen from the DeFi sector through hacks. Last week a hacker netted $20 million from exploiting Ankr and stablecoin issuer Helio Protocol.

On the Flipside

  • Lodestar Finance had asked the hacker to reach out to the dev team to find a white-hat agreement and move on with recovering users’ funds.

Why You Should Care

As the DeFi sector pushes towards mainstream adoption, security has been highlighted as a critical issue that must be resolved.

Find out about the biggest DeFi hacks in:

Top 5 Hacks That Rocked DeFi in 2022

Read about the future of DeFi in:

Can DeFi Replace Traditional Finance? Finance Experts Weigh In

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Author
Milko Trajcevski

Milko Trajcevski is a DailyCoin news reporter, mainly focused on Ethereum (ETH), Cardano (ADA), and their founders (Vitalik Buterin and Charles Hoskinson). Milko is an avid follower of crypto and blockchain technology and has written thousands of articles on the subjects. He finds joy in transforming complex issues into written content that anyone can understand. Milko has used and analyzed numerous exchanges, such as Coinbase, FTX, and Binance. He also closely follows all of the latest news around the largest decentralized exchanges (DEXs). Location: Skopje, Macedonia

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