DeFi protocol Abracadabra Finance fell victim to a significant security attack, resulting in the loss of over $6.4 million in crypto assets, according to Blocksec and Peckshield.
DeFi protocol Abracadabra Finance fell victim to a significant security attack, resulting in the loss of over $6.4 million in crypto assets, according to Blocksec and Peckshield. The attacker bypassed insolvency checks and borrowed a large number of Magic Internet Money (MIM) stablecoins with less collateral.
Abracadabra Finance is a DeFi lending and borrowing platform that allows users to deposit various cryptocurrencies as collateral to borrow the MIM stablecoin. The attack caused MIM to briefly depeg to a low of $0.77 before recovering to $0.98, according to CoinMarketCap data.
Blocksec's chief technology officer, Lei Wu, explained that the root cause of the attack was a rounding issue leading to precision loss. This enabled the attacker to exploit the smart contract and drain the protocol's funds. At the time of writing, over $29 million in assets remained in the affected contract. The attacker funded the attack with 1 ETH through mixing protocol Tornado Cash.
A DAO contributor to Abracadabra Finance, who goes by the handle @LickMyRomy on X, acknowledged the exploit and stated that they have “mitigated already and [are]investigating” the attack. The project also announced that its DAO treasury will buy back MIM from the market and burn them to recover from the incident and the associated MIM depeg. Abracadabra Finance was co-founded by Daniele Sesta, a notable figure in the DeFi space known for his involvement in projects like Wonderland Money and Popsicle Finance.
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