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Decentralized finance (DeFi) protocol Platypus has experienced a loss exceeding $2 million in assets following another flash loan exploit on its platform. In reaction to the incident, the protocol has halted all of its pools.
As reported by the blockchain security firm CertiK, the DeFi platform faced three separate attacks, resulting in a total theft of $2.23 million. The initial attack occurred on Oct. 12, extracting $1.2 million from the platform. A subsequent attack took place just hours later, taking $575,000 worth of assets. A minute after that, the third attack happened, leading to a loss of $450,000 in assets.
In light of suspicious activities within our protocol, we have proactively decided to temporarily suspend all pools.
We will provide further updates to the community promptly.
We appreciate your patience and understanding during this period.— Platypus (++) (@Platypusdefi) October 12, 2023
Platypus operates as an automated market maker (AMM) protocol, enabling the automatic trading of digital assets through liquidity pools, as opposed to traditional markets that involve buyers and sellers. The platform secured $3.3 million in 2021 during a funding round led by the now-defunct Three Arrows Capital.
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A flash loan attack occurs when traders take advantage of a vulnerability that permits them to borrow cryptocurrency instantly without the requisite collateral for the transaction.
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CertiK highlighted that the recent flash loan attack marks the third incident involving Platypus in 2023. On Feb. 16, the protocol suffered a loss of $8.5 million in a similar exploit, which also resulted in the depegging of the Platypus USD (USP) stablecoin, causing its price to drop from $1 to $0.48. CertiK also reported that the protocol lost approximately $157,000 in a flash loan exploit in July.
In March, the DeFi protocol established a compensation portal for those affected by the February attack. This portal allowed users to verify the amount of compensation they could receive from the platform and provided a means for them to express their concerns prior to the distribution of funds.
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