On Aug. 5, data analytics firm IntotheBlock reported a sharp drop in Curve Protocol’s Total Value Locked (TVL) after a recent hacking attack led to a spate of liquidity drains. According to a tweet from IntotheBlock, Curve’s TVL has fallen to $1.67 billion, a significant drop from the previous peak of $3.1 billion.
Notably, large liquidity pools such as stETH/ETH managed to maintain a semblance of stability, seeing a modest 20% drop in liquidity. However, the impact was far more pronounced on smaller pools like sETH/ETH, which bore the brunt of the liquidity drain with a staggering 50% drop.
The incident has sparked discussions about the security and robustness of DeFi protocols, with analysts and experts emphasizing the need for continuous scrutiny and security improvements.
Curve Finance hacker returns $10 million in Ethereum
The JPEG protocol for non-fungible tokens (NFT) and decentralized finance (DeFi) has confirmed the return of 5,495 Ethereum (ETH) tokens worth approximately $10 million by Curve Finance hacker. This return comes after the protocol suffered $11.6 million in losses in a July 30 hack.
In exchange for returning the stolen funds, the hacker received a bounty of 610.6 ETH, which equals $1.1 million. In a statement released on Aug. 4, the JPEG team announced that the funds had been returned to the decentralized autonomous organization’s multisig wallet address. The team also stated that any further investigation or legal action against the hacker would be dropped as they viewed the incident as a white hat rescue.
The DeFi ecosystem took a hit last month when the hacker exploited a vulnerability in the Vyper smart contract programming language, leading to an estimated $70 million worth of cryptocurrency losses across various projects. Affected projects included Ellipsis, Alchemix, JPEG’d and Metronome, with Curve Finance losing around $22 million worth of Curve DAO (CRV) tokens.
On August 3rd, a collaboration between Curve, Metronome and Alchemix was recently announced with the aim of recovering the stolen funds. The hacker agreed to this initiative and returned a total of 4,820.55 Alchemix ETH ($8.8 million) to Alchemix Finance. Furthermore, they returned 1 ETH ($1,829) to the Curve Finance team and also returned some ETH to JPEG.
Despite the continued evolution of the DeFi space, incidents like these become valuable lessons for developers and users alike. They emphasize the importance of being alert to potential vulnerabilities.
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