Arcadia Finance Hit by $455K Exploit on Both Ethereum, Optimism Networks

Non-custodial decentralized finance (DeFi) protocol Arcadia Finance is the latest victim of a $455,000 exploit that occurred on both the Ethereum and Optimism networks. Confirming the hack, Arcadia revealed that it is working with security partners to minimize the damage after pausing the contracts.

The platform also tightened the law enforcement to deal with the issue.

• PeckShield, a Blockchain security expert, was the first to report the attack on Arcadia and claimed It was due to “lack of validation of untrusted input”, which is being exploited to drain funds from both darcWETH and darcUSDC vaults.
• The company highlighted another weakness of the DeFi protocol — “lack of re-entry protection” — which allows instant liquidation to bypass the treasury’s internal health check.
• The money stolen from Optimism Network’s portion was laundered on the controversial cryptocurrency mixer, Tornado Cash. But the Ethereum portion of the stolen funds, worth more than $103,000, remained parked in a Putting a mark wallet address.
• Arcadia has not yet confirmed the validity of the root cause identified by PeckShield, but said an investigation is underway. latest protocol statement is reading,

“We will continue to work with our partners in security, law enforcement, and the broader community to resolve this issue as best we can. Our first priority is refunds for users of the Arcadia Protocol.”

• Arcadia is a non-custodial and permissionless protocol that was launched on Ethereum and Optimism in March this year. The platform basically allows users to trade instantly with leverage and build up their accumulated ether.
• The latest exploits appear amidst the rampant hacks recorded in the digital asset sector.
• On the first of 2023 alone, Web3 security firm Beosin selected $470 million lost across 108 DeFi protocol attacks.