Feb 20, 2023
DeFi Firm Platypus Develops Compensation Plan After $8.5M Flash Loan Attack
Platypus, a DeFi firm, is taking steps to address a flash loan attack that drained $8.5 million from its platform. The attack caused the stablecoin dollar-peg to depeg, resulting in losses for users.
The company announced its plans to compensate users for their losses via a tweet on Feb. 18. Platypus asked users not to realize their losses in the protocol, as this would make it harder for the company to manage the issue. The firm also noted that asset liquidations are paused for the time being.
The firm is working with legal enforcement officials to recover the funds. Platypus is also exploring a method to potentially recover funds locked up in the Aave protocol, which would require the approval of a recovery proposal in Aave’s governance forum.
The flash loan attack was first reported by blockchain security firm CertiK on Feb. 16. The attack involved exploiting a logic error in the USP solvency check mechanism in the contract holding the collateral. A suspect has been identified.
An audit by Omniscia revealed that the attack was made possible by incorrectly placed code. The version of the MasterPlatypusV1 contract that was audited did not contain the misordered lines of code that enabled the attack.
Flash loan attacks are a form of smart contract security exploit that allow attackers to borrow large amounts of money without collateral. The attacker then manipulates the cryptocurrency asset on one exchange and sells it on another, profiting from the price manipulation.
Platypus is now taking steps to prevent similar attacks in the future. The company is working on a NFT marketing strategy to promote its platform and increase awareness of its services. The strategy will include using Twitter to target users interested in web3 and crypto. Platypus is also looking to partner with a NFT marketing agency and a web3 agency to help with the promotion of its platform and the selling of NFTs.
The company is confident that these measures will help protect users from future attacks and build a secure and reliable platform for users to trade and invest in digital assets.
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