Fei Protocol and Rari Capital Pools Hit By $80 Million Hack

Fei Protocol and Rari Capital are the newest victims of a cybersecurity assault that resulted within the lack of over $80 million, in accordance with DeFi safety agency BlockSec.

On Saturday, BlockSec tweeted that its monitoring system detected an exploit of a number of streams related to the decentralized finance protocols which took benefit of a reentrancy vulnerability.

Fei Protocol shortly thereafter confirmed the assault, shortly pausing all borrowing capabilities to mitigate additional injury. The protocol additionally supplied a $10 million bounty to the hacker if he chooses to return the stolen funds.

What’s Fei Protocol?

Fei Protocol is an algorithmic stablecoin protocol that makes use of the Protocol Managed Worth (PCV) mannequin to handle its stablecoin, which is pegged towards the U.S. greenback. 

Whereas this mannequin eliminates the dangers of dying spiral or seigniorage, something that impacts the PCV belongings might affect the peg. Following Saturday’s announcement, the peg dropped 0.4 p.c, and is presently at $0.9982 on CoinGecko.

Rari Capital, however, is a permissionless lending protocol, which permits customers to create Fuse swimming pools the place they’ll provide and borrow ERC-20 tokens. Final 12 months, Fei Protocol and Rari Capital merged after a closely supported proposal by each communities. The aim behind the merge was to additional bootstrap liquidity for the Fuse swimming pools, with FEI offering the required preliminary liquidity.

BlockSec additional shared a snapshot of the assault exhibiting that the hacker stole crypto belongings in Wrapped ETH. Because it stands, it’s very possible the hacker won’t be taking Fei Protcol up on its provide, given the funds have began to be laundered via Twister Money.

With this assault, the sum of money misplaced to crypto exploits this 12 months continues to develop and would possibly overtake that of 2021. Over $1 billion was stolen in Q1 of this 12 months, together with the record-breaking $600+ million from Axie Infinity. This assault comes a month after Axie Infinity introduced it has been hacked, and in the identical week the place a number of DeFi protocols, together with Deus DAO and Saddle Finance, have additionally misplaced tens of millions to exploits. 

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