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Dead DeFi Protocol Yield Leaks Cryptocurrencies in Hacked Pool

Hackers recently exploited smart contracts from defunct DeFi lending platform Yield Protocol and managed to siphon cryptocurrency assets worth around $181,000.

Although Yield Protocol closed in December 2023 due to business demand challenges and regulatory pressures, it repeatedly advised investors to close their positions, withdraw funds, and settle outstanding loans.

Despite these warnings, an unknown hacker has successfully targeted Yield Protocol smart contracts on the Arbitrum blockchain. The hack was initially reported by PeckShield, a blockchain investigative firm, and later confirmed by CertiK.

After further investigation, CertiK discovered that the attacker was exploiting the difference between the pool token balance and the total supply through short-term borrowed assets to withdraw additional pool tokens. Unfortunately, there has been no official support for them since Yield log ended on February 2, attempts to recover the stolen funds appear unlikely.

In March 2023, Yield Protocol, along with ten other decentralized finance protocols, suffered losses due to an attack on non-custodial lending platform Euler Finance. However, by July 2023, Yield Protocol had fully recovered from the attack.

During the recovery, Yield Protocol worked with Euler to return the funds. They deployed 26 new contracts and made about 300 authorized calls to reset the fixed-yield tokens' terms and restore the functionality of the protocol.

Also Read: Aligned Layer Secures $20 Million in Funding Led by Hack VC

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