Circle-backed protocol Pike Finance loses $1.6m due to ‘USDC vulnerability’

Pike Finance, the decentralized protocol for cross-chain lending, suffered a loss of $1.6 million due to weak security measures in functions that manage USDC transfers.

Pike Finance, a decentralized finance protocol specializing in cross-chain lending, fell victim to a hacking attack, resulting in a significant loss of $1.6 million worth of altcoins. In an

Attention to Users:

On April 30, 2024, the Pike Beta protocol was used for 99,970.48 ARB, 64,126 OP, and 479.39 ETH.

This exploit is related to the first USDC vulnerability reported last week on April 26th.

He spoke to pause the protocol…

— Pike (@PikeFinance) May 1, 2024

According to the Pike Finance team, this exploit is related to a “USDC vulnerability” that previously cost the protocol $299,127 in stolen USDC via Ethereum, Arbitrum, and Optimism. In its post-mortem report on April 28, the team said Pike Finance lost assets “due to weak security measures in the functions that manage USDC transfers” via the cross-chain transfer protocol.

“The particularly critical flaw was in functions designed to burn USDC on a source chain and mint it on a destination chain (automated by Gelato’s automation services). “Inadequate protection of this function allowed attackers to modify the recipient’s address and amounts validly processed by the Pike protocol.”

Pike Finance

This time, the vulnerability led to “storage mapping misalignment,” allowing the protocol’s smart contract to behave in a different way, allowing attackers to bypass administrative access and withdraw funds as a result. The team also announced a 20% reward for those who can provide the return of funds or “information leading to the recovery of funds.”

Pike, which launched in 2023, has raised $50,000 in USDC funding from Circle and Wormhole to help the protocol launch its mainnet in early Q1 2024. Pike Finance is a cross-chain liquidity provider that offers users the option to source and borrow local assets. different blockchain and sidechain networks.