Decentralized finance (DeFi) protocol Defrost Financeannounced that it was hacked, but the blockchain security firm peckshieldbased on community intelligence, the hacking incident 12 million a dollar run rug pull Said it could be.
Hack or Rug Pull?
The Defrost team said in a tweet thread on Dec. 25 that a flash loan was used to drain funds from the V2 product in the first attack.
In a second larger attack, the private key was used to capture V1. The protocol, which offers leveraged trading on the Avalanche blockchain, did not say how much funding was received.
Peckshield’s analysis showed that the attack used a fake collateral token with manipulated pricing.
Rug pulls can occur when developers create and set up a liquidity pool and withdraw funds after investors have purchased the corresponding token.
The total value of locked funds in Defrost Finance, which peaked at $95 million in February, was around $13 million in recent weeks, according to Defi Llama data. That figure fell below $93,000 on December 25.
If the attack is a rug pull, this is unusual. Often the team behind the plan remains silent and cannot be contacted.
However, Defrost Finance said in a tweet that it was willing to negotiate with the people behind the attack for the return of the funds. An attempt to reach the firm on Twitter failed because direct messages were disabled on the account.
DeFiYield, which offers a cross-chain digital asset management platform as well as a security service for smart contracts to prevent investors from being defrauded or hacked, said that it conducted an audit on Defrost Finance a year ago and highlighted the smart contract vulnerability used in the attack.
*Not investment advice.
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