Feb 20, 2023

Platypus to Compensate $8.5M Flash Loan Attack Losses

Crypto firm Platypus recently announced plans to compensate users for losses incurred in a flash loan attack that drained nearly $8.5 million from the firm’s stablecoin dollar-peg. The attack affected the protocol’s USP stablecoin, causing it to depeg from the U.S. dollar and drop to $0.33.

The attack was first reported by blockchain security firm CertiK in a tweet on Feb. 16. The tweet also included the alleged attacker’s contract address. Platypus followed up with a tweet on Feb. 18, asking users not to realize their losses in the protocol and announcing that asset liquidations were paused. The firm is currently working with legal enforcement officials to recover the funds and will be releasing further details soon.

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.

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 of the MasterPlatypusV1 contract that was audited 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.

In light of the attack, Platypus is now working with NFT marketing agencies to promote the platform and increase awareness of its services. The firm is also exploring ways to use Twitter NFT marketing to reach a wider audience and increase the platform’s user base.

Platypus has also established itself as a web3 agency, helping other businesses to create and sell NFTs. The firm is offering a range of services, from creating digital assets to marketing them, to help businesses make the most out of the NFT space.

The attack on Platypus is a stark reminder of the need for businesses to ensure their smart contracts are secure and up-to-date. To prevent similar attacks, businesses should ensure they are using the latest version of their smart contracts and regularly audit their code. Additionally, they should consider working with a web3 agency to help them create and promote their NFTs, and use NFT marketing strategies to reach a wider audience.

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