Sturdy Finance loses over $800,000 in recent exploit.
The latest victim in a long list of DeFi hacks is the decentralized finance (DeFi) protocol Sturdy Finance. According to reports, the platform has lost 442 ETH (worth slightly over $800,000 as of publication) due to a daring security exploit.
The blockchain security firm PeckShield was the first to notice what appeared to be price manipulation by the attacker before alerting the lending platform to the bogus transaction on Monday.
It took Sturdy Finance nearly an hour to respond to the claims, but it eventually halted all of their markets. The DeFi protocol then confirmed the attack, assuring users that everything was under control. The platform has taken the necessary steps to ensure that no additional funds are at risk of being drained.
Despite Sturdy Finance’s seemingly fast response, the attacker was still able to make off with $800,000 in ETH and has since transferred the ill-gotten funds to the crypto mixer Tornado Cash, completing the faulty price oracle exploit.
Sturdy Finance, Not ‘Sturdy’ Security?
While it might be easy to fault the victim platform, the hack further validates the overall vulnerability of DeFi protocols to such attacks. DeFi hacks have skyrocketed in recent times, and many argue that the DeFi ecosystem has proven time and again that it is indeed an exploiter’s paradise.
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There was the $625 million loss in the Ronin Bridge, then the $80 million theft that happened to Qubit Finance. More recently, Euler Finance also lost $196 million to a flash loan attack in March. So, it is clear that security challenges persist in the sector. But the reason for the challenges is not exactly unknown.
DeFi allows for financial transactions to occur on the blockchain without intermediaries. The decentralization and lack of clear regulation are what make DeFi vulnerable to various types of hacks to date.
However, DeFi has continued to evolve, showing impressive growth nonetheless. And so too must its security, if it is to enable a safer environment for users to navigate the ecosystem.