The DeFi stablecoin Platypus Finance (USP) has lost its peg to the dollar after an attack in which an unknown person withdrew $8.5 million worth of assets from the Avalanche-based protocol.
Dear Community,
We regret to inform you that our protocol was hacked recently, and the attacker took advantage of a flaw in our USP solvency check mechanism. They used a flashloan to exploit a logic error in the USP solvency check mechanism in the contract holding the collateral.— Platypus 🔺 (🦆+🦦+🦫) (@Platypusdefi) February 17, 2023
The team reported that the hacker took advantage of an “instant loan” and a logical error in the solvency check mechanism in the collateral contract.
After losing $8.5 million, the funds in the main pool cover approximately 35% of user deposits.
3/ There were losses totaling 8.5M from the main pool. Right now deposits from users are covered up to 35% of their deposits. Funds in other pool are unaffected.
The hacker has been contacted to negotiate a bounty in exchange for a return of the funds.— Platypus 🔺 (🦆+🦦+🦫) (@Platypusdefi) February 17, 2023
The developers of the protocol approached several companies, including Binance, Tether and Circle, to freeze the stolen assets. They offered the hacker himself to negotiate a refund for the bounty.
The stablecoin of the USP project lost about 52% in price after the exploit. Theoretically, the USD-pegged coin is trading at $0.48 (CoinGecko).
Platypus Finance provides users with services AMM-platforms for linked assets. According to DeFi Llamathe total value of funds blocked in the protocol is $40.77 million. At the peak in March 2022, the figure reached $1.25 billion.
Recall that in 2022 the Web3 industry lost about $3.6 billion as a result of hacks. This is almost 50% more than a year earlier, Beosin experts calculated.
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