The Great Flash Loan Heist
On March 13, the decentralized finance (DeFi) world faced a wake-up call with the flash loan attack on Euler Finance, ripping a gaping hole through its defenses. In a matter of moments, funds were frozen or lost across 11 different protocols, sending ripples of panic through the DeFi ecosystem. Hold onto your wallets, folks; this isn’t your typical Friday the 13th horror story.
Balancer: The Heavyweight Affected
Let’s start with Balancer, a heavyweight in the DeFi space boasting over $1 billion in total value locked (TVL). Unfortunately, the Euler Boosted USD (bb-e-USD) pool took a nasty hit, losing around $11.9 million worth of tokens during the exploit. Balancer’s emergency subDAO acted fast, pausing the pool and shifting it into recovery mode. However, by the time they hit the brakes, over 65% of the pool had already been swallowed by the attack.
Angle Protocol: The Euro-Crisis
Angle Protocol feels the burn too, with an early estimate suggesting losses exceeding $17 million in USD Coin (USDC). This has stirred up jitters about the agEUR stablecoin, which has been left scraping the bottom of the collateral barrel. As the team works to prepare a detailed balance sheet, all minting and redemption of agEUR has been suspended. Talk about a collateral crisis!
Idle Finance and Yearn Finance: The Affected Duo
Idle Finance has stepped up to the plate with a detailed loss report, chalking up about $5.9 million to the exploit. In response, they’ve hit pause on all Best Yield vaults and Yield Tranches connected to Euler. Meanwhile, Yearn Finance, with a respectable $423 million in TVL, was indirectly affected through Angle and Idle, tallying losses of approximately $1.38 million. But fear not, Yearn’s team assures that any bad debt will be covered by its treasury. It’s nice to know there’s a safety net in this treacherous financial circus.
More Protocols in the Mix
Yield Protocol reported that its mainnet liquidity pools, built on Euler, have suffered as well. They’ve suspended borrowing and are investigating the attack with an estimated loss of less than $1.5 million. InverseFinance took a hit as well, losing over $860,000 from the DOLA Fed for the DOLA-bb-e-USD pool on Balancer. On a slightly brighter note, SwissBorg managed to minimize its losses thanks to its Risk Management Procedure, ensuring minimal impact on its users.
The Bigger Picture
Other DeFi players like Opyn, Mean, Sense, and Harvest also reported possible effects, but details on their losses remain scarce. When the dust settles, the cumulative losses from all affected protocols could hit a staggering $37.6 million. Once a shining star in the crypto lending scene, Euler Finance’s TVL plummeted from over $311 million to just over $10 million post-exploit, showing just how quickly fortunes can crumble in the crypto landscape.
This incident serves as a hard lesson for DeFi participants: always keep one eye on security and the other on your digital assets. Because when the flash loan hammer falls, it’s not just Euler that gets hurt; the entire ecosystem feels the sting.
