A flash loan attack has caused losses of $220,000 on the popular decentralized exchange QuickSwap operated by Polygon. The exchange was targeted by the assault.
Flash Loan Attack Siphons Off Funds
On Monday, hackers used a flash loan attack on a popular decentralized exchange (DEX) and stole $220,000 worth of cryptocurrency. The QuickSwap team talked about the attack on Twitter, where they told people what happened. The team has also turned off its lending protocol, QuickSwap Lend, to limit the damage caused by the attack. The team also said that the exploit only affected its Market XYZ lending market and that all user funds are safe. The QuickSwap team also said that the Qi DAO protocol gave the Market XYZ funds that were taken away.
They tweeted,
“QiDaoProtocol provided the seed funds for this market. No user funds were compromised. We are encouraging users with funds deposited in Market xyz’s open markets on QuickSwap to withdraw them now, as we are in the process of closing them down QuickSwap. QuickSwap is strongly encouraging Market xyz to fully compensate Qi Dao for their losses.”
Mechanics Of The Hack
Flash loans are defined as loans that crypto users can get from DeFi platforms without having to put up collateral. So, none of the users’ funds were affected by the QuickSwap flash loan attack. But they are more likely to be taken advantage of in situations like this one, where a bad guy with a lot of money changed the price of an asset by taking out big loans and then quickly selling them back for a big profit. Also, because the QuickSwap DEX doesn’t require sign-ups (unlike a centralized exchange), it’s easy for bad actors to join and use these exploits. PeckShield, a blockchain security company, says that the hackers have tried to hide the money by using Tornado Cash, a tool that is allowed to mix cryptos.
Hacktober Wreaking Havoc
In 2022, a lot of attacks have been made on lending platforms and other DeFi protocols. The attackers seem to be working harder, especially in October, which is now called “Hacktober” because of how many attacks happen in that month. The Mango Markets lending platform was hacked for $117 million. Soon after, hackers broke into Moola Markets, BitKeep Wallet, and Olympus DAO. Both Mango Markets and Moola Market were hacked, but the attackers gave back most of the money and kept a bug bounty.
