Blockchain safety firm CertiK has shared a autopsy evaluation of the $5.8 million Lodestar Finance exploit that occurred on Dec. 10:
5. The hacker burned a bit of over 3 million in GLP, their revenue on this exploit was the stolen funds on Lodestar – minus the GLP they burned.
6. 2.8 Million of the GLP is recoverable, which is value about $2.4 million. We’re going to attain out to the hacker and…
— Lodestar Finance (,) (@LodestarFinance) December 10, 2022
In the same occasion, CertiK mentioned that Lodestar Finance hackers “artificially pumped the worth of an illiquid collateral asset which they then borrow towards, leaving the protocol with irretrievable debt.”
“Regardless of a number of the losses being probably recoverable, the protocol is functionally bancrupt proper now, and customers are being urged to not repay any loans they’ve taken out.”
The assault occurred by way of a vulnerability within the PlutusDAO’s plvGLP token on Lodestar. In accordance with its documentation, Lodestar “makes use of verified, safe Chainlink worth feeds for each asset it provides excluding plvGLP.” As a substitute, the trade charge of plvGLP to GLP relied on whole property divided by whole provide on Lodestar.
As defined by CertiK, the exploiter first funded their pockets with 1,500 Ether (ETH) on Dec. 8 after which took out eight flash loans for a complete of roughly $70 million value of USD Coin (USDC), wrapped Ether (wETH), and Dai (DAI) two days later. This drove the plvGLP/GLP trade charge to 1.00:1.83, which meant that the exploiter was in a position to borrow much more property from the protocol.
The borrowings shortly consumed all of the liquidity on the platform, main the hacker to switch the funds out of Lodestar and leaving customers with dangerous debt. It’s estimated that the exploiter made a complete of $6.9 million in earnings by way of the assault vector.
“Whereas Lodestar is reaching out to the exploiter in an try to barter a bug bounty ex publish facto, the funds are prone to be largely unrecoverable. Within the absence of an insurance coverage fund that may cowl the losses, customers of the platform bear the price of the exploit.”
CertiK warned that the assault “is the results of flaws within the protocol’s design quite than a bug in its sensible contract code.” The blockchain safety agency additional highlighted that Lodestar launched with out an audit, and, due to this fact, with out a third-party overview of its protocol design.
