Feb 19, 2023

Platypus DeFi Devising Compensation Plan After $8.5M Flash Loan Attack

Platypus, a DeFi firm, is taking steps to compensate users for their losses after a flash loan attack drained nearly $8.5 million from its stablecoin, USP, causing it to depeg from the US dollar.

The company announced in a tweet on Feb. 18th that it was working on a plan to compensate the damages 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 company also said that asset liquidations are currently paused.

Platypus is currently working with different parties, such as legal enforcement officials, in order to recover the funds. Further details will be released soon, they said.

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

Blockchain security firm CertiK first reported the attack through a tweet on Feb. 16th, along with the alleged attacker’s contract address. As a result of the attack, Platypus USD (USP) dropped to $0.33 at the time of writing.

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

Flash loan attacks are a type of smart contract security exploit that allow attackers 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.

In response to the attack, Platypus is working with a NFT marketing agency to promote their platform and the sale of NFTs. They are also using Twitter to spread awareness of the attack and how users can protect themselves from similar attacks in the future.

The company is also exploring the use of a web3 agency to help them better understand the web3 space and how to best use it for NFT promotion. This will help them better protect their users and create more opportunities for selling NFTs.

Platypus is committed to protecting its users and is taking all necessary steps to ensure the safety of their funds. They are also working to create a more secure environment for users to engage with the web3 space.

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