Attacks are currently being launched against Avalanche, a company that has lately risen to the forefront due to recent reports of litigation and market manipulation. Blockchain cybersecurity company CertiK revealed the assault on the AVAX network. The statement by CeriK indicates that the massive alternative cryptocurrency venture was attacked with a “flash loan” responsible for the theft of $370,000 in USDC from a smart contract as well as multiple liquidity providers.
In addition to the well-known alternative cryptocurrency asset, a number of important DeFi initiatives have also been affected. These include Trader Joe, which is a decentralized exchange (DEX), Nereus Finance, which is a staking system, and Curve Finance, which is an asset management company.
When a hostile actor engages in a flash loan attack, they often borrow unsecured cash from a lending protocol in order to influence the price of a certain asset. In other words, it is a kind of assault in which the aggressor raises the value of the asset that was borrowed by means of manipulation.
Because of the nature of a flash loan assault, after the hacker has successfully stolen the asset, they will immediately resell the money that they have borrowed and retain the profit for themselves.
The identity of the perpetrator of the flash loan assault is unknown, as is the case in most of these incidents. Prior to it, there had been a number of flash loan assaults, the most notable of which occurred in 2022 and targeted the DeFi Beanstalk platform, which resulted in a loss of $182 million.
The Avalanche network is compatible with Ethereum and has an ecosystem of decentralized applications in addition to staking activities that are achieved using the network’s proof-of-stake consensus process.
