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Indexed Finance Suffers $16 Million Exploit

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@xabi
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Evening

Two days ago, decentralized finance (DeFi) project Indexed Finance got hacked for $16 million. Indexed Finance is a defi project built on Ethereum, that produces tokens tracking market indexes.

Apparently, the hacker found a way to trick Indexed Finance's smart contracts using the flash loan mechanism by overloading the protocol with new assets. As a result, the price of indexed tokens was lowered allowing hacker to mint new ones and cash out. Two out of six assets in the protocol, DEFI5 and CC10 have plummeted by 85% and 98% respectively. There other assets DEGEN, NFTP and ORCL5 remained safe, whereas the sixth asset FFF was damaged beyond salvaging.

It is pertinent to mention that before launching Indexed Finance protocol was already reviewed by two independent security experts, yet vulnerabilities were not identified.

Indexed Finance is yet to announce any kind of compensation plan for the affected users. But apparently progress has been made in tracking the hacker as they apparently didn't cover their tracks quite well. Indexed Finance team is banking their hopes on hacker returning the lost funds voluntarily and keeping 10% of the funds as bug bounty, just like the case of Poly Network, before taking any further legal action.

As the Indexed Finance joins the long list of exploited defi projects, we are reminded again that despite being profitable defi space is as vulnerable as it gets, doesn't matter how much security audits and reviews had been performed.

Posted Using LeoFinance Beta