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Cryptocurrency News Articles
Delta Prime Exploited by Hacker Minting Excessive Tokens, Insurance to Cover Losses
Sep 17, 2024 at 10:36 am
A hacker stole $6 million from Delta Prime, a decentralized finance (DeFi) protocol, by minting an excessive amount of deposit receipt tokens and redeeming only a small portion for cryptocurrency.
A hacker has drained $6 million from Delta Prime, a decentralized finance (DeFi) protocol, by exploiting a vulnerability to mint an excessive amount of deposit receipt tokens and redeem only a small portion for cryptocurrency.
According to blockchain transaction records, the attacker minted more than 115 duovigintillion Delta Prime USD (DPUSDC) tokens during the attack on Monday. These DPUSDC tokens are receipts for USDC, a stablecoin that is pegged to the U.S. dollar and held at Delta Prime, with a 1:1 redemption ratio.
The attacker burned just 2.4 million of the DPUSDC tokens, redeeming $2.4 million in USDC. They then went on to mint over 1 duovigintillion Delta Prime Wrapped Bitcoin (DPBTCb) tokens, followed by 115 octodecillion Delta Prime Wrapped Ether (DPWETH) tokens, and several other types of deposit receipt tokens.
In total, the attacker redeemed over $1 million in Bitcoin (BTC), Ether (ETH), and Arbitrum (ARB) tokens.
The attack was made possible after the hacker gained access to a developer’s private key, which allowed them to take control of an admin account ending in b1afb. They then used this account to execute an “upgrade” function on Delta Prime’s liquidity pool contracts.
This function, which is intended to be used for updating the protocol’s software, allowed the attacker to point each proxy to a malicious contract that they had created. This malicious contract, in turn, gave them the ability to mint a massive number of deposit receipt tokens.
By exploiting this process, the attacker was able to drain multiple liquidity pools without having to attack each user individually.
In a post on X, Delta Prime confirmed the attack, stating, “At 6:14 AM CET, DeltaPrime Blue (Arbitrum) was attacked and drained for $5.98M.”
The team clarified that only the DeltaPrime Blue version on Arbitrum was affected, while the Avalanche version was safe. Delta Prime also noted that the protocol’s insurance will cover losses “where possible.”
Security expert Chaofan Shou, who analyzed the attack, estimated the total loss at $7 million and said that the attack was carried out due to vulnerabilities in the protocol’s upgradeable contracts.
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