Deus Finance Got Exploited For $13.3M On Fantom: Report

Deus Finance got exploited for $13.3 million on Fantom and the attack used a flash loan it was the second in two months so let’s read more today in our latest cryptocurrency news.

The decentralzied finance application Deus Finance got exploited for the second time with the attacker gaining more than $13.4 million of cryptocurrency during the early Asian Hours with the security researchers at PeckShield saying the exploit occurred on the Fantom network. The Deus protocol allows developers to build financial services like futures trading, lending, and options on the paltform. The attacker used a flash loan to trick the way that the Deus smart contract reads data on the platform’s liquditiy pools which allowed the attacker to inflate the value of assets and borrow funds but also make a profit after repaying the loan.

The @DeusDao was exploited today in https://t.co/USKNHhXeid with ~$13.4M gain for the hacker (The protocol loss may be larger).

— PeckShield Inc. (@peckshield) April 28, 2022

Some $143 million were borrowed as a flash loan and the hacker was able to make a profit of $13.3 million with PeckShield saying that the total losses could be higher. The Deus ecosystem is comprised of two tokens, DEI and DEUS. The latter is the governance token on the platform but minting DEI as a stablecoin pegged 1:1 to the US dollar, burned DEUS, and redeeming DEI according to the developer documents. The exploit was the second in two months which was attacked in a similar manner for $3 million back in March.

Using the flash loan, Deus’ attackers were able to manipulate prices on the liquditiy pool that consisted of USD Coin and DEI and use the manipulated DEI price to borrow and drain the pool. The Flash Loans allow for DEFI users to take millions of dollars as a loan against zero collateral and this is not magic or free money. The loan has to be repaid before the transaction ends or the smart contract will reverse the transaction like it never existed.

The liquditiy pools like USDC and DEI, rely on oracles to ensure that they are priced correctly at all times and to borrow within limits that don’t exceed the total value of the pools. The oracles are blockchain-based tools that provide smart contracts that have trusted external information. These are required because the blockchains can store data but can verify if the data input is accurate. After the attack, the DEUS prices fell 16.5% in the past day.