The non-custodial decentralised finance (DeFi) protocol Arcadia Finance faced an attack and a hacker stole almost $455,000 from the protocol by taking advantage of a flaw in the programming code.
Blockchain security firm, PeckShield, was alerted about the Arcadia Finance attack by noticing “the lack of unknown input validation.”
The code allegedly lacked a cross-checking validation method for inputs that had not been checked. Through this flaw, the hacker was able to steal money from the Ethereum (darcWETH) and Optimism (darcUSDC) vaults, totaling about $455,000.
The developers, however, informed the media that the PeckShield-identified root cause is incorrect.
After receiving a warning from PeckShield, Arcadia Finance verified the hack two hours later and immediately suspended the contracts to stop any additional money loss.
The investigations are ongoing, and another weakness in Arcadia’s code exists that, if exploited, may have catastrophic consequences for the platform.
As stated by PeckShield, “Additionally, the absence of reentrancy protection enables the rapid liquidation to avoid the internal vault health check.”
The majority of the money taken, rouhly180 Ether, came from Optimism and wiped through Tornado Cash. The supposedly taken ETH coins, which are worth more than $103,000 right now, are still present at the address of wallet.
Moreover, more than $300 million was lost as a result of cyberattacks and exploits in the crypto industry during the second quarter of 2023.
A study by blockchain security organization, CertiK found that during the third quarter, 212 security flaws from Web3 protocols totaling $313,566,528 were discovered.
According to data from Q2 of the prior year, 58% fewer crypto attacks occurred. The BNB Smart Chain had the most incidents of the group, with 119 incidences totaling losses of $70,711,385.
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