Skip to content
Real Cryptocurrency Hub

Real Cryptocurrency Hub

Crypto Comeback Pro is an auto trading platform that allows you to invest in the crypto market and start making money right away. Sign Up HERE

  • Home
  • Start Trading
  • English
    • English
    • Español
    • Italiano
    • Polski
    • Svenska
    • Deutsch
    • العربية
  • News
    • Mining
    • Bitcoin (BTC)
    • ATM
  • Guides
  • How To’s
  • Exchange/Wallet
  • Brokers
  • Bitcoin Price Prediction
  • ✉ Contact
  • Home
  • Crypto News
  • Wrap Finance Exploited Of $7.7 Million From A Possible Flash Loan Attack
  • Crypto News
  • Crypto Token
  • Scams

Wrap Finance Exploited Of $7.7 Million From A Possible Flash Loan Attack

Lucas Duffy December 18, 2020 3 min read

DeFi has its many advantages, likewise some disadvantages as well. The present rise of frequent attacks on the space is something users are worried about. The current attacks reveal that the technology is somewhat vulnerable to some unwanted attacks.

Hackers are not just going for ransomware; they are also notorious for creating deliberate flash loan attacks which leads to loss of funds. There is a considerable possibility that Wrap Finance’s recent loss of money could be due to a flash loan attack by hackers. The unknown cyber criminals compromised the protocol, where assets worth millions of dollars are kept.

Wrap Finance suffer the loss of $7.7 million

The DeFi protocol, Wrap Finance, suffered an unexpected flash loan attack when the people behind the attack initiated the flash loan to perpetrate their crime. The many features DeFi promises led to interest by numerous investors who locked their money in different protocols in the DeFi space.

The hackers have exploited the billions sealed in the protocol and have seen the vulnerability of the platform to access more funds. Unfortunately, new projects are not safe in the hands of these criminals, and Wrap Finance is their latest victim.

The platform operates by allowing investors to keep their digital assets sealed in exchange for stablecoins. Interestingly, the hackers compromised the software to allow borrowing worth more than the collateral left behind. The complex flash loan attack was described as unusual and has made the platform lose a lot of money.

Wrap Finance shared the unfortunate incident to the public and explained that the hackers made away with $7.7 million worth of stablecoin. However, the Finance security team maintained that $5.5 million out of the money was still recoverable because it is secured in the collateral vault. The reassuring message has put some tension to rest, but it’s still unfortunate the company lost money.

Why protocols are vulnerable to flash loans

The recovery of the $5.5 million in stablecoin is not so sure, but the platform reported that if the discovery succeeds, the users will be refunded their $5.5 million. The team promised a gradual refund of the remaining $2.2 million which might not be recovered.

Now, looking at how different the flash loan is different from the regular loan in cryptocurrency. The regular crypto loans have sufficient collateral to back up the loan collected if the user defaults in payment. This is not the same with flash loans because the loan is expected to be paid immediately after, hence the ‘flash’ loan.

When the loan is not settled at the appropriate time, the contract between the lender and the borrower would be like it never happened. The loan has been applauded for its time effectiveness and convenience in the past few years.

Nevertheless, the lack of collateral in the contract made it vulnerable to hackers who are always looking for loopholes in technology to exploit. Even though DeFi platforms have overtime beefed up their securities to reduce the attacks, 2020 suffered so many flash loan attacks from the bad actors in the DeFi space.

Post Views: 597

Continue Reading

Previous: Bitcoin Sets Record Breaking Price Of US$ 23,777 But Critics Suggest Its Temporary Only While Some Suggest A Bitcoin For $100K Is “Preposterously Low”
Next: Nigeria Is Now The Second-Largest Bitcoin (BTC) Market In The World After US

Related Stories

Withdrawals Have Been Frozen By Hodlnaut Citing Market Conditions
2 min read
  • Crypto News

Withdrawals Have Been Frozen By Hodlnaut Citing Market Conditions

August 3, 2022
Following a Strong Trend, Lido DAO is All Set to Record a Downward Movement
2 min read
  • Crypto News
  • Price Analysis
  • Trading

Following a Strong Trend, Lido DAO is All Set to Record a Downward Movement

August 2, 2022
Coinbase Obtains Operational License In Italy
3 min read
  • Crypto News
  • Cryptocurrency Exchange / Crypto Wallet

Coinbase Obtains Operational License In Italy

August 1, 2022

Read our disclaimer

Name Price24H (%)
bitcoin
Bitcoin (BTC)
$23,871.00
2.35%
ethereum
Ethereum (ETH)
$1,780.13
4.00%
tether
Tether (USDT)
$1.00
0.04%
usd-coin
USD Coin (USDC)
$1.00
0.17%
binancecoin
BNB (BNB)
$324.70
-0.41%
ripple
XRP (XRP)
$0.377749
1.00%
cardano
Cardano (ADA)
$0.53
0.22%
polkadot
Polkadot (DOT)
$9.21
4.70%
dogecoin
Dogecoin (DOGE)
$0.070791
1.15%
Uniswap
Uniswap (UNI)
$8.82
-0.56%

Recent Posts

  • Withdrawals Have Been Frozen By Hodlnaut Citing Market Conditions

    Withdrawals Have Been Frozen By Hodlnaut Citing Market Conditions

    Hodlnaut has announced that it has frozen its services for the users. The firm made an official announcement
  • Following a Strong Trend, Lido DAO is All Set to Record a Downward Movement

    Following a Strong Trend, Lido DAO is All Set to Record a Downward Movement

    Lido DAO (LDO) has proven to be one of the top performers in the cryptocurrency industry in the
  • CTproz Review – A Recommended Crypto Broker

    CTproz Review – A Recommended Crypto Broker

    CTproz Review The number of people engaging in online trading continues to rise, and if you don’t want
  • Coinbase Obtains Operational License In Italy

    Coinbase Obtains Operational License In Italy

    One of the top crypto exchanges in the market, Coinbase recently achieved yet another milestone, as it was
  • Central Bank Of Honduras Warns About Crypto Dangers

    Central Bank Of Honduras Warns About Crypto Dangers

    A release was recently published by the Central Bank of Honduras that is aimed at clarifying the institution’s

Start Trading

Categories

Top Posts

  • After Tesla, a lot of Giant Tech Firms Joined the Crypto Space

    After Tesla, a lot of Giant Tech Firms Joined the Crypto Space

    The pioneer in making Bitcoin as an alternative to make payments officially would have to be Tesla, and
  • Ripple is Partnering up with Sustainability Leaders to Reach its 2030 Go-green Goal

    Ripple is Partnering up with Sustainability Leaders to Reach its 2030 Go-green Goal

    Despite the wreckage that Ripple carries on its back, given the recent events in the USA leading to
  • US Investors Attracting Towards Bitcoin,” Says Senator Ted Cruz

    US Investors Attracting Towards Bitcoin,” Says Senator Ted Cruz

    Taken by Sean Hannity at Fox News, Senator Ted Cruz talked about Bitcoin and said that investors are
  • Famous Movie Theatre Chain AMC Starts Accepting Crypto

    Famous Movie Theatre Chain AMC Starts Accepting Crypto

    Not too long ago, the crypto community went through a somewhat confusing ordeal when it had been reported
  • Zimbabwe’s Securities Law to Include Virtual Asset Service Providers

    Zimbabwe’s Securities Law to Include Virtual Asset Service Providers

    A proposal to amend the laws of “securities” has been placed by the Zimbabwean Government, according to which,

Archives

You may have missed

Withdrawals Have Been Frozen By Hodlnaut Citing Market Conditions
2 min read
  • Crypto News

Withdrawals Have Been Frozen By Hodlnaut Citing Market Conditions

August 3, 2022
Following a Strong Trend, Lido DAO is All Set to Record a Downward Movement
2 min read
  • Crypto News
  • Price Analysis
  • Trading

Following a Strong Trend, Lido DAO is All Set to Record a Downward Movement

August 2, 2022
CTproz Review – A Recommended Crypto Broker
3 min read
  • Brokers
  • Reviews

CTproz Review – A Recommended Crypto Broker

August 1, 2022
Coinbase Obtains Operational License In Italy
3 min read
  • Crypto News
  • Cryptocurrency Exchange / Crypto Wallet

Coinbase Obtains Operational License In Italy

August 1, 2022
  • Kraken
  • OrbitGTM
  • Fxoro
  • KuCoin
  • Huobi
  • Bitfinex
  • PrimeXBT
  • CTmatador
  • DXCBIT
  • PrimeHolders
  • CMC Markets
  • XCGIN
  • Virtual Payout
  • Gamma Capitals
  • Towards Soure
  • CoinsMarkets
  • ArgoTrade
  • Global Solution
  • CTProz
Copyright © All rights reserved. | DarkNews by AF themes.
  • bitcoinBitcoin(BTC)$23,871.002.35%
  • ethereumEthereum(ETH)$1,780.134.00%
  • tetherTether(USDT)$1.000.04%
  • usd-coinUSD Coin(USDC)$1.000.17%
  • binancecoinBNB(BNB)$324.70-0.41%
  • rippleXRP(XRP)$0.3777491.00%
  • cardanoCardano(ADA)$0.530.22%
  • SolanaSolana(SOL)$42.501.16%
  • polkadotPolkadot(DOT)$9.214.70%
  • dogecoinDogecoin(DOGE)$0.0707911.15%
  • UniswapUniswap(UNI)$8.82-0.56%
  • bitcoin-cashBitcoin Cash(BCH)$144.181.69%