Decentralized protocol Yearn Finance, one of the historic services in the Ethereum ecosystem, reported an exploit on November 30th that resulted in losses of nearly $9 million.
Yearn is Automate investment strategies in decentralized finance (DeFi). That contract manages user deposits and takes actions to optimize performance.
This incident affected one of its pools. stable swapa type of smart contract designed to exchange assets that maintain similar value to each other.
Yearn reported that the exploit occurred with a customized version of the code. stable swap And also his V2 and V3 vaults (automated investment vaults) are not at risk.
How did the abuse of the Yearn contract occur?
through a statement regarding
The term minting refers to the creation of new tokens within a smart contract. In this case, the attacker was successful in closing the deal. Generate large amounts of yETH without any real backing.
yETH tokens represent a user’s participation within the affected pool. When someone deposits ETH or equivalent assets, they receive yETH proportionately.
Hackers discovered flaws such as You can now create tokens without donating funds. In effect, you have acquired undeposited liquid “ownership tokens”.
Improperly created yETH allows malicious attackers to withdrew real funds from the pool Also includes the yETH-WETH pair (wrapped ether). Therefore, we used incorrectly generated tokens to deplete real liquidity.
According to Yearn, reserve losses amounted to $8 million in the main pool and an additional $900,000 in pools located on Curve Finance, another decentralized Ethereum platform. The total amount is approximately 9 million.
The team pointed out that emergency room activated We will be working with SEAL 911 (Rapid Incident Response Group) and ChainSecurity, one of our contracted auditors, to conduct a full investigation.
Native Yearn Token (YFI) as well I was shocked. YFI fell 6.55% in the past 24 hours.trading at approximately $3,800 at the close of this note.
Later, in the immediate aftermath of the attack on Yearn, yETH price crashes to 0:
Details of the Yearn Finance attack
User known as Cos on X, founder of SlowMist Team (a company specializing in security and analytics) On-chain) provided additional aspects.
The analyst noted that the person responsible had “prepared a very small amount of gas (0.0006384 ETH) from the Railgun Privacy Protocol 28 days ago.” A railgun is such a tool. Transaction data can be hidden Through cryptographic proof.
Pre-preparing the gas means the attacker has minimal funds left ready to plan their moves and take action. without revealing his true identity.
He also detailed that this operation ended up moving “1000 ether (ETH) to TornadoCash, a mixer that fragments and combines funds from multiple users.” To prevent tracking.
Their movements can be seen in the following diagram.
According to their analysis, it was originally 1100 ETH, but 100 was withdrawn for later use. The balance sent to the mixer matches the estimated loss of the exploit, suggesting that the mining was performed directly and efficiently.
Furthermore, the SlowMist founder asserted that “just like the previous Balancer hack, this one is the work of the same phishing group” – an attack that manipulates data and tricks users and systems into accepting false information.
Cos concluded by describing hackers as follows: “Someone with very high standards of cleanliness”mentioned the meticulous way he covered his tracks.