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Lending Protocol Lendf.me Loses 99% of its Assets in a Recent Attack

dforce-defi-lendf.me

DeFi Pulse reported that lending protocol Lendf.me has lost $25 million worth BTC and ETH in a recent attack.

One of Decentralized finance protocol dForce’s lending protocol Lendf.me recently experienced a hack worth $25 million worth ETH and BTC.

The news was confirmed by Lendf.me in an interaction with the Chinese news outlet Chain News. which also quoted, “At present, the technical team has located the problem and advised all users to stop depositing assets in the loan agreement on the web page. Data from DeFi Pulse shows that hedging assets fell 57% within a few hours. At present, the utilization rate of multiple funds on the platform has reached 99%, and the utilization rate of imBTC’s funds is 100%. The data on the chain shows that the attacker has transferred the assets to the two platforms, Compound and Aave.”

The attack was performed at 8:45 Beijing time Sunday at block height 9899681. Some DeFi protocol builders speculate that the attack was performed by imBTC, a fraudulent Ethereum token pegged 1:1 with bitcoin. If this is true, then the attacker must have drained the funds for free. 

Post this attack, dForce has lost nearly 99% of its total assets, and DeFi Pulse explained the loss through a chart on its official website

It is not yet clear if Lendf.me users were able to withdraw any funds before the attack. However, Compound CEO Robert Leshner speculates that the attackers were successful in seizing the entire $25 million worth crypto. He stressed on the fact that imBTC is an ERC777 token and not a normal Ethereum asset. He went on to add, “This is a follow-up attack to the imBTC Uniswap attack yesterday.” Robert also warned that smart contracts involving imBTC must be extra cautious in order to prevent re-entrance attacks. As of now, Lendf’s accounts holdings stand below $6. 

The dForce Foundation recently raised $1.5 million as a part of its strategic funding round. The round was led by Multicoin Capital, Huobi Capital and Chinese bank CMB International (CMBI). It planned to use the capital to increase its employee strength and work towards new DeFi products. 

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