crypto

Breaking: Deus Finance’s DEI Stablecoin Hacked, Massive 30%+ Token Price Crash Unfolds

Deus Finance’s stablecoin, DEI, has experienced a significant hack, causing its token price to drop by more than 30%. The DEI token, which was initially pegged at $1, lost its peg during the attack and is currently trading at $0.20. The cause of the attack has been identified as a fundamental technical issue in the token contract, leaving the project to call for the community’s help in overcoming the consequences.

A fundamental implementation mistake in a token contract refers to a problem in the code that affects its function or security. In the case of the DEI stablecoin, a fundamental implementation error allows anyone to issue additional DEI tokens without restrictions or controls, enabling hackers to take advantage of the token contract and influence the token price.

The Deus Finance project aims to make enterprise-grade blockchain derivatives accessible to the general public, serving as a foundation for on-chain digital derivatives that include synthetic stocks, commodities, foreign exchange, and cryptocurrency. DEI is used as collateral for every financial instrument and protocol built on the Deus Finance infrastructure.

On April 28, Deus Finance was hacked, with hackers stealing Ethereum (ETH) worth up to $13.4 million, according to PeckShield. The hack was made possible by using a flash loan to manipulate the price oracle, which reads from the StableVW AMM – USDC/DEI pair. Hackers initiated the attack using 800 ETH, which was withdrawn from Tornado Cash and transmitted to Fantom through MultiChain. At the end of the assault, the stolen funds were converted to ETH and deposited into the hacker’s account.

In response to the hack, the DEI project has called upon white-hat hackers to help retrieve the stolen funds. In a recent tweet, DEUS (@DeusDao) stated, “For all white hackers that were able to rescue funds during the DEI exploit from today 05/05/2023…As a DEUS team owned multisig on Arbitrum. Please get in touch with us if you have not already.”

The DEI hack highlights the risks and challenges faced by the crypto and DeFi industries. As the sector continues to grow, it is essential for projects to prioritize security measures and ensure that their smart contracts and token contracts meet the highest standards.

Investors must also exercise caution when dealing with cryptocurrencies and DeFi projects, as the market is still in its infancy, and incidents like these can lead to significant losses. It is crucial to conduct thorough research before investing in any project to understand its security measures, team, and track record.

The recovery process for the DEI project will depend largely on the community’s involvement and support; however, it is still an uphill battle. The DEI team and community will need to collaborate to address the technical issues and restore investor confidence in the project.

Hacks and exploits are becoming an unfortunate norm in the blockchain and DeFi industries. Moving forward, it will be critical for the industry to focus on addressing these security vulnerabilities alongside the rapid development of new technologies and protocols.

In summary, the DEI stablecoin by Deus Finance was hacked, resulting in a significant loss of value and shaking investor confidence. The hack was caused by a fundamental technical issue in the token contract, emphasizing the importance of robust security measures and thorough research before investing in cryptocurrencies and DeFi projects. As the industry continues to develop, prioritizing security and addressing vulnerabilities will be vital to its long-term success and adoption.

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