Lodestar Finance exploited in flash mortgage assault


Arbitrum-based lending protocol Lodestar Finance was exploited in a flash mortgage assault on Dec. 10. Based on Lodestar, the attacker manipulated the value of the plvGLP token earlier than borrowing all platform liquidity utilizing the inflated token.

In a Twitter thread, Lodestar defined the assault move. The attacker first manipulated the trade charge of the plvGLP contract to 1.83 GLP per plvGLP, “an exploit that by itself can be unprofitable”, stated the corporate.

Then, the attacker equipped plvGLP collateral to Lodestar and borrowed all out there liquidity, cashing out a part of the funds “till the collateralization ratio mechanism prevented a full liquidation of the plvGLP.”

Following the hack, “a number of plvGLP holders additionally took benefit of the chance and in addition cashed out at 1.83 glp per plvGLP.” The hacker was in a position to burn a bit of over 3 million in GLP, making revenue on the “stolen funds on Lodestar – minus the GLP they burned.”, famous the DeFi platform.

The attacker made round $5.8 million in revenue. Lodestar states that just about 2.8 million of the GLP (about $2.4 million) was recoverable, which must be used to repay depositors. The corporate is making an attempt to barter a bug bounty with its exploiter:

In case you are the hacker, attain out to us so we are able to discover a white-hat settlement and transfer on.

Recovering the funds of our customers is the principle precedence and we are going to generously reward your collaboration.#Hack #whitehat #Arbitrum $LODE #Exploit #DEFI https://t.co/SWlCr3KMib

— Lodestar Finance (,) (@LodestarFinance) December 10, 2022

The primary vulnerability that led to the assault is inside GLPOracle and the way it conducts its worth. In an evaluation, Solidity Finance audit group stated the occasion highlighted “that using oracles immune to manipulation is a critically essential piece of DeFi, particularly in protocols which lend out person belongings.”

In a press release, governance aggregator PlutusDAO famous that its “merchandise and platform functioned precisely as supposed via your complete occasion. All funds on Plutus are fully secure. The exploit was solely a results of Lodestar’s oracle implementation.” It additionally said:

“We need to take accountability for selling an unaudited protocol. Whereas the exploit is by no means Plutus’ fault, we acknowledge the truth that we had been too keen to advertise a protocol integrating plvGLP. With plvGLP gaining vital traction, we’ve wished to focus on all plvGLP integrations to our neighborhood to emphasise the adoption and alternatives the integrations have introduced each to particular person customers and protocols. For this, we apologize. We jumped the gun, and going ahead we are going to not be selling protocols that aren’t audited.”

The Lodestar assault was much like the Mango Markets exploit on Oct. 11, when over $100 million was stolen via an attacker manipulating worth oracle knowledge, permitting the hackers to take out under-collateralized cryptocurrency loans.


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