Decentralized US dollar stablecoin protocol Raft claims that despite multiple security audits, the company still suffered a security attack last week that resulted in a loss of $6.7 million.
According to the project’s post-mortem report dated November 13, a few days earlier, a hacker borrowed 6,000 Coinbase-wrapped staked Ether (cbETH) on the decentralized finance protocol Aave, transferred the sum to Raft and minted 6.7 million Raft stablecoins , called “ R”, using a smart contract flaw.
The unauthorized minted funds were then swapped by the platform across liquidity pools on decentralized exchanges Balancer and Uniswap, generating net proceeds of $3.6 million. Following the attack, the R stablecoin was unpegged.
According to the message:
“The root cause was a precision calculation issue in the minting of stock tokens, which allowed the attacker to obtain additional stock tokens. The attacker used the increased index value to increase the value of his shares.”
The smart contracts exploited during the incident were audited by blockchain security firms Trail of Bits and Hats Finance. “Unfortunately, the vulnerabilities that led to the incident were not discovered during these audits,” the Raft developers write.
The project says it has filed a police report since the November 10 incident and is currently working with central exchanges to trace the flow of stolen funds. All of Raft’s smart contracts are currently suspended, although users who have minted R “retain the ability to redeem their positions and retrieve their collateral.”
Decentralized stablecoins are minted using users’ crypto deposits as collateral. Last December, the decentralized stablecoin HAY was de-pegged from the US dollar after a hacker exploited a smart contract flaw and minted 16 million HAY without appropriate collateral. The HAY stablecoin has since been re-pegged, in part because the protocol requires a 152% collateralization ratio at the time of use as part of risk management.
We are aware of a potential security vulnerability.
We are currently conducting an investigation and will provide an update as soon as possible.
– Raft (@raft_fi) November 10, 2023
Related: September will be the month with the most crypto exploits in 2023
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