DeFi loan protocol warp finance attacked, lost $7.7 million in stablecoins

Warp Finance is a lending protocol for decentralized financing (DeFi) and they have been hit by an attack on flash loans. As a result, $7.7 million of stablecoins were lost.

Borrowing more than underwalls cover

Warp says the attack essentially allowed one user to borrow more money than the value of the collateral provided. This resulted in a loss to other users or lenders. With flash loans, users can borrow money without having to provide collateral, provided the money is repaid within a single blockchain transaction. This is then laid down in a smart contract.

DAI and USDC

Warp did not immediately explain how the attack took place or which stablecoins were lost, but Nick Chong of Hex Capital tweeted the right transaction showing the loss of DAI and USDC stablecoins.

Specifically, 3.85 million DAI and 3.92 million USDC in the Warp contracts. These are both stablecoins so 1 DAI is worth 1 dollar and 1 USDC is also worth 1 dollar. If you add these together, you arrive at a total loss of 7.7 million USD.

5.5 million dollars is repaid

Warp says they plan to recover about $5.5 million that is still in the safe (for collateral). After successful recovery, the protocol wants to distribute the money to users who have suffered losses.

Warp expects to publish a detailed analysis in the coming days.