Optimism-Based Exactly Protocol Hacked: Over $12M in Ether Drained

Optimism network-based decentralized credit market Exactly Protocol became the target of exploitation on August 18th. The breach resulted in a significant drop in the platform’s total value locked (TVL).

Meanwhile, Exactly’s recently-announced native token – EXA – slumped by more than 27% over the past day. The protocol was halted temporarily.

Another DeFi Project Hacked

Blockchain security firm PechShield was the first to alert Exactly Protocol of the attack and warned users to take necessary actions. Preliminary investigation suggested a loss of 4,300 ETH, equivalent to $7.3 million. However, the latest update by De.Fi, a Web3 antivirus platform, revealed that more than 7,160 ETH, worth nearly $12.04 million, has been drained from the protocol.

The security firm also explained that the exploitation strategy appears to involve funding an exploiter contract on Ethereum, transferring deposits to the layer-2 blockchain, Optimism, before ultimately bridging stolen funds back to Ethereum.

Exactly Protocol has not yet confirmed the attack but said it is investigating a security issue, as a result of which the platform has been halted temporarily. Users can still withdraw their assets. Its official statement regarding the same read,

“We’re actively investigating a security issue within our protocol. To ensure user safety, the protocol is temporarily paused (you can still withdraw assets). Our team is on top of this and will share more details asap.”

According to stats, the total value locked in Exactly Protocol nosedived from $37 million to $11.74 million following the attack, representing a decline of nearly 70%.

Rampant Security Attacks on DeFi

The latest development comes amidst rampant exploitation across the DeFi sector. Solana-based DEX Cypher Protocol was hacked, where the exploiters netted close to $1 million in crypto-assets earlier this month.

However, more than half of the stolen funds were later frozen in collaboration with centralized crypto exchanges as well as private blockchain investigators, while seizure warrants have been issued by law enforcement agencies.

But not all exploits have a happy ending. More recently, the DeFi project Zunami Protocol suffered more than $2 million in losses via price manipulation made possible by donating to the protocol.

The article was first published on: Aug 18, 2023