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DeFi protocol Inverse Finance hit by $15 million exploit

Updated: Jul 25, 2024
Published: Apr 2, 2022
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Peckshield explained in another tweet that the exploit was possible due to a price oracle, a manipulation bug that allowed the hacker to manipulate the price of the native token $INV and use those tokens as collateral to drain assets from the protocol. The lost funds were denominated in ETH, WBTC, and DAI. After stealing the funds, the hacker deposited 4200 ETH worth $14.7 million into TornadoCash, a popular transaction mixer on the Ethereum network.

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Inverse Finance has been exploited

Blockchain analytics firm PeckShield noticed the exploit early and alerted the Inverse Finance team on Twitter that a large amount of cryptocurrency had been stolen. In response, the team confirmed the situation in a tweet on Saturday morning, writing, "We are currently addressing the situation, please wait for an official announcement."

What is Inverse Finance?

Inverse Finance describes itself as a set of permission less decentralized finance tools that allow users to lend and borrow with their cryptocurrency. The protocol also has its own stable coin DOLA, which tracks $1 and can be mined with other assets as collateral, as well as its own governance token $INV, which can also be used as collateral on the platform.

Its governance token $INV is down 16% at the time of writing in response to the hack, and currently, most users are waiting for an announcement from the team itself to see how they will react to the situation and whether they will release a post-mortem.

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