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April 18, 2022 02:40 pm

DeFi Project Beanstalk Loses $182 Million in Flash Loan Attack

Decentralized finance project Beanstalk Farms suffered one of the largest-ever flash-loan exploits on Sunday, sending its price tumbling. From a report: The credit-focused, Ethereum-based stablecoin protocol suffered a total loss of around $182 million and the attacker got away with around $80 million of crypto tokens, according to blockchain security firm PeckShield, which had flagged the incident on Twitter. The project's native token BEAN fell about 75% from its $1 peg against the dollar, pricing from CoinGecko showed. The protocol's creators disclosed their identities on Beanstalk's Discord server, and said that they were not involved in the attack. "We are not aware of the identity of the individuals who were involved. Like all other investors in Beanstalk, we lost all of our deposited assets in the Silo, which was substantial," the founders wrote. It isn't yet clear whether investors who lost funds will be reimbursed -- or if so, how and to what extent. Unlike traditional lending, which requires a loan to be secured with a collateral or credit checks, DeFi smart contracts allow users to borrow huge sums of stablecoins in what are known as flash loans, without any form of security. Flash loans, where the entire process of borrowing and returning the loan happens in a single transaction on the blockchain, are fairly popular among arbitrage traders.

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