DeFi Protocol Abracadabra Finance Suffers $6.4 Million Hack
DeFi lending protocol Abracadabra Finance appears to have suffered a security breach, leading to over $6.4 million drained from its smart contracts.
Security researchers, including PeckShield, estimate total losses may still increase, with nearly $29 million in digital assets remaining at risk across its platform.
Key Details:
- The attack targeted and exploited the Abracadabra cauldron contract.
- Currently, an estimated $6.4 million has been hacked.
- But an additional $29 million is still vulnerable as the threat continues.
- Abracadabra to buyback and burn stablecoin deposits from the open market.
- Founded by developers linked to Wonderland, Popsicle Finance.
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Blockchain intelligence firm PeckShield initially flagged suspicious transactions before analysts at BlockSec confirmed signs of an outright hack penetrating Abracadabra contract security.
Abracadabra says team is investigating the hack
In a brief statement, the Abracadabra team acknowledged detecting an exploit impacting specific lending pools on the Ethereum network.
Engineers are actively investigating whether the attack managed to access admin controls or utilized more limited vectors like flash loans.
As part of its incident response, the decentralized autonomous organization (DAO) behind the DeFi money market aims to purchase and burn outstanding balances of its Magic Internet Money (MIM) stablecoin to contractually reduce the circulating supply.
Read more: Crypto Funds Record $500 Million In Net Outflows Last Week
“To the best of its Ability, the DAO treasury will be buying back MIM from the market to then burn,” said MIM Spell on X.
Following the incident, the price of MIM has depegged and plummeted to a low of $0.7638. However, according to the latest data, the price has slightly recovered and is trading at $0.949 at press time.
With smart contract risks still posing development challenges, the latest breach exemplifies the threats persisting across even long-running DeFi structures.
