Feb 20, 2023

DeFi Firm Platypus to Compensate $8.5M Flash Loan Attack Losses

Crypto platform Platypus has announced plans to compensate users for losses incurred after a flash loan attack drained almost $8.5 million from the protocol, causing its stablecoin dollar-peg to depeg.

The attack was first reported by blockchain security firm CertiK on Feb. 16, who tweeted the contract address of the alleged attacker. In response, Platypus tweeted on Feb. 18, saying they were working on a plan to compensate the losses, and 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 stated that asset liquidations were paused.

Part of the funds are currently locked up in the Aave protocol, and Platypus is exploring a method to potentially recover them, which would require approval of a recovery proposal in Aave’s governance forum. The company also said that different parties, including legal enforcement officials, are currently involved in the funds’ recovery process.

The flash loan attack exploits the smart contract security of a platform to borrow large amounts of money without collateral. Once a cryptocurrency asset has been manipulated on one exchange, it is quickly sold on another, allowing the exploiter to profit from the price manipulation.

A post-mortem analysis conducted by auditing company Omniscia revealed the attack was made possible by incorrectly placed code after it was audited. The version of the MasterPlatypusV1 contract audited from Nov. 21 to Dec. 5, 2021 did not contain the misordered lines of code.

The attack has highlighted the importance of NFT marketing and promotion, as well as the need for crypto and web3 agencies to create effective strategies for selling NFTs. As the use of NFTs continues to grow, so too will the need for marketing and promotion to ensure their success.

Twitter NFT marketing is an effective way to promote NFTs, as it allows users to reach a large audience quickly and easily. An NFT marketing agency can help to create and implement effective strategies for promoting NFTs, and can provide valuable insights into the NFT market.

Platypus is hoping to recover the lost funds, and has promised to provide more details about the next steps soon. The firm has also said that it will continue to work to ensure the security of its platform and the protection of its users’ funds.

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