NORMIE, the meme coin project of the Base ecosystem, was shaken by a flash loan attack on May 26, when its price dropped by 93% in a short time. This incident highlights the vulnerabilities that still plague the DeFi (Decentralized Finance) space and the difficulties projects have in mitigating such attacks. Here are the details…
Meme coin was attacked by flash loan
According to data from CoinGecko, the attack was carried out through a series of strategic maneuvers by the attacker. Blockchain researcher @onchainfudder revealed that the attacker found a critical vulnerability in the NORMIE contract. With only 0.63% remaining supply of tokens in circulation, the attacker was able to repeatedly manipulate the buy and sell functions after disabling transaction fees. This triggered the contract’s built-in mechanism designed to automatically sell tokens in excess of 1% when fees reach a certain threshold.
The attacker’s actions led to a massive sell-off that dropped the price significantly. But the story doesn’t end there. The attacker then purchased a significant amount of these sold tokens for practically zero price in the same transaction block. This tactic allowed them to make a significant profit from the entire operation.
How did the project benefit?
It is important to note that while the attack caused significant financial losses for NORMIE owners, the project itself also benefited to some extent. The automated token dump triggered by the attacker’s manipulation generated significant funds for the project through transaction fees. This raises concerns about conflicts of interest and the possibility that the project party was aware of the abuse in advance.
The NORMIE team responded to the attack with an official statement and apologized for the incident. They assured users that the distributor still had more than 500 ETH in their wallet and that they planned to use it for compensation and recovery efforts. The project is actively seeking solutions and is in communication with key partners to address the situation.
What’s next?
But the path forward remains unclear. The NORMIE team has not yet confirmed whether a full redistribution of the project or a fork is required. Additionally, they warned users not to purchase NORMIE tokens until further notice, citing the risk of the attacker manipulating the token supply through further minting or purchasing.
This flash loan attack on NORMIE is a striking reminder of the evolving nature of DeFi threats. While the project is taking steps to recover, the incident raises questions about its potential impact on the project’s security infrastructure and investor confidence. As the NORMIE team weathers this crisis, the broader DeFi community is watching their solution carefully, hoping to learn valuable lessons that can help strengthen the entire ecosystem against future attacks.
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