According to a tweet from blockchain security company CertiK, Thursday saw a flash-loan attack on the decentralised finance (DeFi) system Platypus Finance. The potential loss associated with the exploit is $8,500,000.
According to CoinGecko, Platypus USD (USP), the protocol’s stablecoin, lost its price peg to the dollar due to the exploit, dropping to 48 cents from its $1 anchor.
A member of the Platypus team said on the protocol’s Discord channel, “For now all operations are paused until we get more clarity.”
Platypus is an Avalanche blockchain-based automated market maker where crypto traders may exchange stablecoins. According to DefiLlama, it has 59 million dollars worth of digital assets locked on the protocol, much less than the all-time high of $1.2 billion attained in March of last year.
A flash loan is a sort of unsecured borrowing popular among traders using decentralised finance (DeFi) lending protocols to capitalise on arbitrage opportunities rapidly. Nevertheless, exploiters often use flash loans to destabilise and drain digital assets from DeFi protocols.
