Defrost Finance Exploited and Lost $12M
In a bear market, you want to see light and think positively. But you cannot ignore reality and close your eyes. There is no shortage of bad news like hacks, exploits, and fraud that causes users to lose billions of dollars.
Defrost Finance is liquidated by flash loan hackers. As a result, users lose over $12 million. It is confirmed by blockchain security company PeckShield. According to PeckShield, Defrost Finance is exploited with a flash loan attacker that triggers a $12 million loss.
Defrost Finance is a decentralized leveraged trading platform on Avalanche and it is attracting users with lucrative APYs. Some users complained about the significant loss in funds and they are not happy with what's going on. It is unusual. Defrost Finance team looked into it and noticed that Defrost V2 has been attacked and exploited.
They advised people not use to use Defrost V2. But at the beginning, Defrost Finance core team said that Defrost V1 is okay. They are investigating more about how it happened and hackers initiated the flash loan attack. They thought only Defrost V2 was under attack. Later, they warned people about Defrost V1 due to the attack.
Observing the whole situation, Defrost Finance team is trying to negotiate with the hackers. According to the latest tweet and post on medium, they are able to negotiate with the hacker involved in Defrost V1 hack. It may take some time, but they will return the funds to the users.
It is good to see market betting APYs. You think you are losing big time without putting your money there. DeFi is going to be big, but when you get involved in DeFi, you are taking risks. DeFi hacks and exploits are not new in crypto. Many people lost their crypto becoming a victim of the attack.
You have to consider the risk that you taking when you get involved in DeFi. I think it is better to learn from your experience. When everyone around you says this is a good thing and they are making fortune with sky-high APY, it does not mean you will get the same results.
People usually don't share how much they lose. So you will never get to know their losses. When you consider the risk and return, you can make a good decision. You will find a balance in your financial decision.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
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I think Defrost Finance is the next FTX one.