Feb 19, 2023

DeFi Firm Platypus to Compensate $8.5M Flash Loan Losses

Crypto firm Platypus recently suffered a flash loan attack that drained nearly $8.5 million from its stablecoin dollar-peg. The attack has caused the value of the Platypus USD (USP) stablecoin to drop to $0.33. Platypus is now working on a compensation plan to help users recover their losses and has paused asset liquidations.

In a tweet on Feb. 18, Platypus announced it was developing a plan to compensate the losses. The firm asked users not to realize their losses in the protocol, as this would make it more difficult to manage the issue. Additionally, blockchain security firm CertiK identified the alleged attacker’s contract address and reported the attack on the platform on Feb. 16.

Part of the funds are locked up in the Aave protocol, and Platypus is exploring a method to potentially recover them. This would require the approval of a recovery proposal in Aave’s governance forum. Additionally, different parties, including legal enforcement officials, are currently involved in the funds’ recovery process. Further details about the next steps will be disclosed soon, noted Platypus.

Auditing company Omniscia conducted a technical post-mortem analysis and revealed the attack was made possible by incorrectly placed code after it was audited. The version of the MasterPlatypusV1 contract from Nov. 21 to Dec. 5, 2021 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. The attacker then sells the manipulated cryptocurrency asset on another exchange, allowing them to profit from the price manipulation.

In order to prevent similar attacks in the future, Platypus is working with NFT marketing agency Web3 to promote the platform and increase its visibility in the crypto and web3 space. Web3 will help Platypus with NFT promotion, Twitter NFT marketing, and other strategies to help the firm reach more users and increase awareness of its platform.

Platypus is also working with Web3 to develop a comprehensive NFT marketing strategy to help the firm sell NFTs and increase the platform’s user base. Web3 will help Platypus develop a comprehensive NFT marketing plan, including the use of Twitter, influencers, and other channels to promote the platform and its NFTs.

By working with Web3, Platypus hopes to increase its visibility and reach more users in the crypto and web3 space. The firm also hopes to use NFT marketing and promotion to boost its user base and help it sell NFTs. With the help of Web3, Platypus is confident it can recover from the attack and continue to provide a secure and reliable platform for users.

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