Grim Finance has become the latest DeFi platform to succumb to an exploit. As 2021 draws to a close, DeFi exploits have ramped up at a pace where there seems to be a platform recording a hack each week. The platform lost a total of over $30 million to the exploit that took advantage of its vault contract to move millions worth of crypto out of the protocol.
How Grim Finance Was Hacked
The DeFi platform took to Twitter to inform its community of the hack and the actions that were being taken going forward to mitigate further losses to users. It explained that the attacker had successfully exploited the platform on Sunday, December 19th, and had made off with over $30 million dollars worth of funds.
https://twitter.com/financegrim/status/1472357770846519312?s=20
Related Reading | Crypto Exchange AscendEX Loses $78 Million In Latest Hack
Grim Finance revealed that the attack was no run-of-the-mill attack but rather an advanced one. The attacker had used the deposit function to execute reentrancy loop attacks on the protocol. The attacker had directly attacked the vault contract which had inadvertently put all of the vault and funds deposited into them at risk.
In response to this, Grim Finance had paused all of the vaults to prevent further damage and advised users to immediately withdraw all of their funds from the protocol.
https://twitter.com/financegrim/status/1472357778488532998?s=20
Total DeFi market cap at $144 billion | Source: Crypto Total DeFi Market Cap on TradingView.com
DeFi Exploits Rocking 2021
The amount of DeFi exploits has been on the rise in 2021. Grim Finance is not the only protocol that has fallen victim to an exploit nor is it the largest. The space is still relatively new and as such, there is still much to be improved upon. Meanwhile, attackers have taken advantage of this to exploit and steal billions of dollars from these DeFi protocols.
Related Reading | BadgerDAO Pulls A Poly Network As It Begs Hacker To Return Stolen Crypto
Data shows that in 2021 alone, the number of scams and DeFi hacks has grown exponentially in the year 2021. Things like rug pulls, the majority of which began as DeFi projects, made up a significant amount of the scams.
Over $2.5 billion has been lost to DeFi exploits in the last five years and over $1 billion of that figure occurred in 2021 alone. It is expected that these hacks would grow with time as more DeFi platforms come onto the scene.
BadgerDAO recently lost over $120 million in a DeFi exploit and crypto exchange AscendEX lost $78 million after falling victim to a hack. However, Poly Network still holds the top spot for the largest DeFi exploit after an attacker made off with over $600 million worth of crypto, which was later returned.
Featured image from TechCrunch, chart from TradingView.com