The DeFi space seems to be getting attention at the moment due to the number of activities going on in the space, particularly the Ethereum reliant protocols and projects. However, there are still a few lapses that can stunt growth, to at least some extent. In a new report gathered on social media, Ethereum powered DeFi protocol, yearn finance, have suffered a loss of about $11 million after one of its DAI projects was exploited. According to the Defi protocol, which allows its clients to earn via crypto trading operations, the situation is closely monitored.
The attacker got away with about $3 million in the loss
According to the official tweet, the vault, v1 yDAI, which was a subject of attack, has now been restored partially. According to one of the developers in the DeFi protocol team, Banteg, who took to Twitter to follow up on the protocol’s tweet, he acknowledges that the unfortunate situation is currently being investigated. The whole matter will soon be resolved.
Banteg confirmed that about $2.8 million of the vaults $11 million were carted away by the attackers. He also mentioned that deposits into the vault by its users are temporarily suspended till normalcy is reached. One of the CEO of the protocol under yearn- Aave, Stani Kulechov, have also taken to social media to discuss his investigation on the exploitation.
Kulechov affirmed that the attack involved an aggregate of 160 nested transactions, resulting in about $2.8 million for the protocol. The announcement took a negative turn on the YFI token price, which fell by at least 20% after the news. However, analysts suggest that the decline might not last long as the token, which had been performing since the beginning of the year, will live up to expectation.
Are DeFi attacks on the rise
In a news report from modern consensus last November, the crypto analysts had weighed the overall losses in the DeFi space versus the whole Blockchain space. The research results showed that despite the curtailing of overall crypto crimes, the attackers are now using the DeFi space as a fortress.
The overall drop in crypto attacks had a negative correlation with the increase in Defi attacks in 2020. The loss of $100 million to crypto attacks and scams last year by the DeFi sector is very disappointing and might be a stumbling block to the protocol’s growth, which had been predicted to grow by 200% by the end of 2021.
The DeFi sector cannot afford a slip up at this time, as most of its governance token is starting to look bright for the market. The big question on everyone’s lips is will the DeFi space become the new hunting ground for crypto attackers?. The answer to the question might be unanswered at the moment, but time will tell.