DeltaPrime Hack: $4.8 Million Lost in Latest DeFi Exploit

DeltaPrime, a decentralized finance (DeFi) protocol, recently lost over $4.8 million in a major security breach that targeted its operations on the Arbitrum (ARB) and Avalanche (AVAX) networks.

This marks the second major security breach in just two months, raising serious questions about the security of DeltaPrime and the DeFi industry as a whole.

How did the hackers pull off this heist? What’s next? Read on to find out.

How the Attack Happened

The hack was first reported by the on-chain security firm PeckShield which said that the attacker modified DeltaPrime’s “claimRewards” contract. This weakness enabled the offender to commit fraudulent activities and obtain funds of about $4.8 million using a code logic exploitation that effectively circumvented important security controls. 

According to PeckShield, the attacker used $1.3 million of the stolen funds in LFJ (formerly known as Trader Joe) and farmed USDC on the Stargate protocol. In response, DeltaPrime quickly halted its activities on the Arbitrum and Avalanche networks, aiming to prevent further losses and assure users that the situation was under control.

DeltaPrime Jumps Into Action

DeltaPrime’s team confirmed that the protocol is temporarily paused on both networks, stating that they have contained the risk and are investigating the issue. They are working to strengthen security and prevent future attacks.

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DeltaPrime’s Security Problems

This latest breach follows another significant hack in mid-September, where DeltaPrime lost $6 million after an administrator’s private keys were compromised. With two major breaches in just two months, these incidents raise concerns about security within DeltaPrime and the DeFi sector at large.

Crypto security specialists have recently criticized the unprotected status of most DeFi protocols by stating that the claimRewards contract vulnerability, which enabled illicit fund transfers, could have been fixed with proper code audits and checks. 

Security researchers have said that security audits rather present a set of options which, when used correctly, minimizes the risks For DeFi protocols handling significant funds, however, a code audit does not guarantee absolute safety.

The question remains: Can DeFi ever truly be secure? We might have to wait and see.