Feb 20, 2023

DeFi Firm Platypus to Compensate $8.5M Flash Loan Losses

Crypto firm Platypus recently experienced a flash loan attack that drained nearly $8.5 million from its stablecoin dollar-peg protocol, prompting the company to develop a compensation plan for affected users.

The attack was first reported by blockchain security firm CertiK on Feb. 16 through a tweet, along with the alleged attacker’s contract address. As a result, the Platypus USD (USP) stablecoin depegged from the U.S. dollar, dropping to $0.33 at the time of writing.

In a tweet on Feb. 18, Platypus said it was working on a plan to compensate the losses, and asked users not to realize their losses in the protocol. Asset liquidations have also been paused, said the protocol.

The firm noted that different parties, including legal enforcement officials, are currently involved in the funds’ recovery process. Further details about the next steps will be disclosed soon.

Part of the funds are locked up in the Aave protocol. Platypus is exploring a method to potentially recover the funds, which would require the approval of a recovery proposal in Aave’s governance forum.

A technical post-mortem analysis conducted by auditing company Omniscia revealed the attack was made possible by incorrectly placed code after it was audited. The version audited by Omniscia “contained no integration points with an external platypusTreasure system” and therefore did not contain the misordered lines of code.

Flash loan attacks exploit 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.

Platypus is now turning to NFT marketing as a way to promote their platform and increase user engagement. The company is partnering with a web3 agency to help them create and launch NFT campaigns that will help spread awareness of the platform and increase user adoption.

The company is also exploring ways to use Twitter NFT marketing to reach new audiences and generate more interest in the platform. They are looking to partner with a NFT marketing agency to help them create and launch effective NFT campaigns on Twitter.

Platypus is also looking at ways to sell NFTs on their platform, as a way to generate more revenue and incentivize users to hold their tokens. They are exploring different options to make sure that they can provide a secure and efficient way to sell NFTs on their platform.

Platypus is working hard to ensure that users are compensated for their losses, and that the platform remains secure. The company is exploring various options to increase user engagement and generate more revenue, including NFT marketing, Twitter NFT marketing, and selling NFTs. With the help of their partners and their own efforts, Platypus is looking to make sure that the platform remains secure and users can trust it.

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