Mon, 10/06/2024 – 14:39
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Just at a time when it appears the crypto scam ecosystem is toning down its influence, the Decentralized Finance (DeFi) lending protocol UwuLend fell victim to a major exploit.
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UwuLend hack saga
According to insights from crypto intelligence service provider CertiK, the protocol’s wallet has been drained of approximately $19.4 million in locked funds. While details of these exploits are still emerging, UwuLend is reportedly suspected of loopholes that might have made the exploit possible.
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UwuLend is a fork of the Aave protocol that was started by Frog Nation’s former CFO, 0xSifu. 0xSifu is the alias of Michael Patryn, the cofounder of the defunct Canadian trading platform QuadrigaCx. To those who know the connection between Patryn and exchange collapses, a trend now appears to be showing itself.
While Aave has not faced any related major exploit, the hack of UwuLend is a testament to how fragile the broader DeFi security system is. While the current prognosis remains unknown, there are instances of hacks and refunds in the crypto ecosystem.
When the Poly Network hack of 2020 took place, the team negotiated a refund with the hacker. With more than $610 million siphoned by the attacker, the entire saga became a celebrated case of Whitehat when a full refund of the stolen money was initiated by the hacker.
Though Poly Network is an outlier in the ecosystem, there have been other related exploits that resulted in permanent losses.
Be cautious
As the UwuLend team and users navigate this disturbing trend, the cautionary note from different industry leaders is now proving to be more resounding. With the prevalence of Deepfake scams and other forms of exploits, teams from Ripple Labs and Shiba Inu are known to always caution their community to keep anyone from getting hurt.
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While the UwuLend exploit might not be avoidable by users or the team, the advice to be cautious remains the golden rule for investors to follow.
