Ethereum-based liquid staking platform Prisma Finance suffered a security exploit earlier today, resulting in the theft of millions of dollars in digital assets. This attack sent shockwaves through the DeFi (Decentralized Finance) space, exposing vulnerabilities and raising concerns about user safety.
Prisma confirmed via their official channels that their vaults were breached, prompting an immediate emergency shutdown to secure remaining funds. However, the damage was already done. While the exact amount stolen remains undisclosed, on-chain data suggests losses exceeding $11 million.
Stablecoin Depegged, Token Price Plummets
The exploit had a domino effect on Prisma’s core offerings. mkUSD, the platform’s stablecoin, lost its crucial $1 peg, dipping to $0.98968 at the time of writing. This deviation from its intended value highlights the potential instability that DeFi hacks can introduce, raising concerns about the reliability of these financial instruments.
The project’s native PRISMA token bore the brunt of the fallout as well, experiencing a dramatic 25% plunge to $0.24. While a slight recovery is underway, investor confidence clearly took a hit.
Total Value Locked Dives, Flash Loan Attack Suspected
The attack also led to a significant decrease in the total value of assets locked (TVL) within Prisma’s vaults. Data from DeFi analytics platform DeFillama reveals a 40% drop, with TVL plummeting from $236 million to a concerning $143 million.
Blockchain security firms Beosin and Cyvers Alert provided insights into the potential exploit method. Beosin suggests a flash loan attack might have been employed, a tactic where attackers borrow large sums of crypto, manipulate a protocol’s smart contracts, and then return the borrowed funds, keeping the illicit profits.
Cybers Security Firms Highlight Attack Details
Cyvers Alert initially flagged suspicious activity, estimating stolen funds around $9 million. However, a critical delay in Prisma pausing their contracts allegedly allowed attackers to exploit a further $1 million.
This incident underscores the importance of swift and decisive action in the face of potential DeFi hacks. Delays in shutting down vulnerable contracts can significantly amplify the damage inflicted by malicious actors.
Also Read: 2023 Phishing Loot Laundered! Hacker Spins $10 Million Through Tornado Cash
Beware of Phishing Attempts
As with any major DeFi hack, phishing attempts are a growing concern. Capitalizing on user anxiety, bad actors are impersonating Prisma, spreading misinformation and urging users to connect their wallets to fake “revocation checkers.” Prisma has strongly advised their user base to exercise extreme caution and rely solely on official communication channels.
The Prisma hack serves as a stark reminder of the evolving threat landscape within DeFi. As the industry continues to grow, robust security measures, prompt incident response, and user awareness remain paramount to mitigate these risks and build a more secure future for decentralized finance.
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