DeFi protocol Arcadia Finance hacked for $455,000

PeckShield analysts reported a hack of the Arcadia Finance DeFi protocol, through which the hacker managed to withdraw digital assets totaling about $455,000.

According to experts, the exploit was possible due to \”a lack of robust input validation.\” The code allegedly lacked a cross-check mechanism for unverified inputs.

The attack affected the Ethereum pools (darcWETH) and Optimism (darcUSDC).

\”Moreover, [the protocol] lacks protection against reentrancy, which allows the instant-liquidation function to bypass the internal viability check of the storage,\” PeckShield added.

The Arcadia team confirmed the breach and, a few hours after the flaw was detected, halted contract executions.

Most of the stolen funds were concentrated in Optimism — 180 ETH (~$336,000 at the time of writing), which have already been sent to the crypto mixer Tornado Cash. The assets withdrawn from the Ethereum pools remain at the hacker’s address address.

In July, the cross-chain protocol Multichain suspended operations due to a potential multi-million-dollar hack.

Earlier, Beosin experts said that in the first half of 2023 the digital asset sector lost about $655.6 million due to hacks, frauds and rug pull.

According to Immunefi analysts, the number of crypto-project hacks rose by 63%. In the second quarter of 2023, such incidents reached 81.