Hacker Steals $2.1M in Zunami Protocol Flash Loan Attack

• Zunami Protocol has lost $2.1 million due to a flash loan hack that manipulated prices.
• The hacker used a flash loan to inject liquidity and made 1,152 ETH in the process.
• Prices of Zunami’s native assets have been impacted by the hack with UZD declining by over 98% and zETH dropping by over 85%.

The Zunami Protocol Hack

The Zunami Protocol, a leading player in the decentralized finance (DeFi) industry, has suffered a major setback after a security breach caused it to lose more than $2.1 million. Blockchain security companies PeckShield and Ironblocks identified the attack which targeted the platform’s Curve Finance-hosted liquidity pool.

How The Hack Was Carried Out

The attacker used a flash loan from Balancer to inject liquidity into the system and manipulate price on the exchange, allowing them to make 1,152 ether (ETH) in profit before withdrawing their funds and returning the flash loan.

Impact On Zunami Native Assets

The attack had significant impacts on both UZD (the Zunami USD stablecoin) and zETH (Zunami Ether). UZD declined by over 98%, while zETH dropped by over 85%, settling at $278. The stolen funds were also channelled through Tornado Cash, an infamous crypto-mixing service platform.

Preventative Measures To Avoid Similar Hacks

In order to avoid similar hacks in future, protocols should consider implementing regular audits of their smart contracts as well as ensuring that they are making use of secure wallet solutions such as multi-signature wallets or hardware wallets for added protection of user funds. Additionally, protocols should ensure that they are regularly updated with new security patches so that any potential vulnerabilities can be addressed quickly before they can be exploited by malicious actors.

Conclusion

The recent hack on the Zunami Protocol serves as an important reminder about the need for robust security measures when dealing with cryptocurrencies and other digital assets on blockchain platforms. By instituting preventative measures such as smart contract audits and secure wallet solutions, users can rest assured knowing their funds are safe from malicious actors looking to exploit vulnerabilities in DeFi platforms for their own benefit.