Defrost v2 had been attacked by a flash loan attack.
The platform eventually recognized a v1 emergency as well.
Both versions of Defrost Finance, a decentralized leveraged trading platform built on the Avalanche blockchain, have been reported to have been hacked. This was announced after investors reported losing staked Defrost Finance (MELT) and Avalanche in their MetaMask wallets.
Doran, a key member of Defrost Finance, revealed that Defrost v2 had been attacked by a flash loan attack shortly after a few users reported an odd loss of funds. Furthermore, Defrost v2 was shut down since it was first thought that Defrost v1 was not affected by the attack.
V1 Emergency Spotted Later
Moreover, the platform at the time thought Defrost v1 was safe from the hack, so it shut down v2 while it looked into it. PeckShield, a blockchain investigation firm, determined that the hacker manipulated LSWUSDC’s share price for a profit of almost $173,000.
Although the corporation made an announcement about the breach, many in the community believe that it was a rug-pull scheme. Due to the fact that Defrost v1 did not have a flash loan feature, it was first reported that it was immune to the hack.
However, the platform eventually recognized a v1 emergency as well. Investors should refrain from utilizing Defrost Finance until further notice. An internal team is presently looking into the issue and will get in touch with users through the proper channels once they have more information. More than $620 million worth of cryptocurrency was stolen from decentralized finance (DeFi) networks in 2022, all at the hands of North Korean hackers.