The DeFi platform Nereus Finance, built on Avalanche, was hit by an arbitrage attack via a 51 million USDC flash loan. The hacker’s proceeds amounted to roughly 370,000 USDC, CertiK estimated.
CertiK Skynet has reported a #flashloan attack on #AVAX impacting contract 0xe767c… & some LPs. The attacker profited ~$370k USDC.
Possible impacted protocols include:@nereusfinance @traderjoe_xyz @CurveFinance
Contact us for analysis.Stay Frosty!☃️ pic.twitter.com/bZvtgVPpl4
— CertiK Alert (@CertiKAlert) September 7, 2022
Using borrowed funds, the attacker manipulated AVAX prices on Nereus. After completing the arbitrage trades and repaying the loan, about 370,000 USDC remained in his address.
Subsequently the attacker moved the funds from the Avalanche blockchain to Ethereum. At a matching address on the Ethereum network, the second-largest by market cap, he had 194 ETH (~$310,000) and 15,850 DAI.
The hacker sent most of the ETH in four transactions of 45 ETH to addresses belonging to the FixedFloat digital asset exchange platform. As of writing, his Ethereum wallet holds 12.7 ETH and all 15,850 DAI.
The Nereus Finance team confirmed the attack:
“This incident affected a single market, and the NXUSD protocol as a whole remains over-collateralised. We are pursuing a recovery process and will publish the results of the investigation soon.”
We are aware of a flash loan exploit on the AVAX/USDC Joe LP NXUSD market. This incident is isolated to a single collateral market and the NXUSD protocol as a whole remains over colateralised. We are executing a recovery process and will be publish a post-mortem shortly.
— Nereus Finance🔺 (@nereusfinance) September 7, 2022
NXUSD is a USD-pegged algorithmic stablecoin from Nereus Finance. In the wake of the incident, the asset’s quotes slid to around $0.89. At the time of writing, the token had not regained parity with the underlying asset and was trading near $0.96 (CoinGecko).
The FBI has described initiating a flash loan as one of the three most popular vectors for attacks on DeFi projects.
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