Curve Finance — Earlier this week, decentralized exchange Curve Finance suffered a setback when its platform was exploited in the weekend. As a result, the firm lost over crypto assets worth $52 million total, as updated by blockchain security firm PeckShield.
While it was certainly a cause for concern, the firm was able to recover and regain its footing thanks to the help from several backstoppers.
Read also: Gucci unveils physical rewards for the 2,895 Vault Material NFT holders
Curve Finance hacked
On Monday, Curve Finance announced that it was exploited a day earlier. Initially, the amount was reported to be over $24 million before PeckShield updated the amount as the hack unfolded in real-time.
Curve Finance has established itself as one of the most popular decentralized exchange platforms today. It allows users to swap like-assets, such as Ethereum for Staked Ethereum or Tether’s USDT for Circle’s USDC. Curve Finance functions as an arbitrage tool for traders once the assets decouple in price from each other.
According to the Curve Finance team, an issue in Vyper compiler version were hacked, affecting three liquidity pools for tokens paired with Ethereum and Curve governance token CRV, and several ERC-20 tokens issued on Alchemix, Metronome Synth, and JPEG’d.
Vyper is a programming language that allows smart contracts writing on the Ethereum blockchain. The language core team shared that older versions of the Vyper programming language were susceptible to hacks and exploitation.
A lead contributor for the programming language also speculated on Twitter that the hackers had likely spent weeks to months trying to identify the vulnerabilities. The tweets highlighted a knock-on effect on the Vyper-based liquidity pool on its deployment on Arbitrum.
Dip in CRV price
Apart from the crypto assets, hackers also made off with 7.19 million worth CRV tokens, translating to $4.52 million. As a result, the price of CRV took a massive dip.
After the exploitation, CRV price dropped to two-month lows of $0.59, which only increased the liquidation risk of Michael Egorov’s loans. If the price had dropped to $0.371, his position would have taken a major blow.
Room to breathe
Michael Egorov, the founder of Curve Finance, was troubled by the exploitation, but he was able to relax a little after the principal value of his loan on Aave took a dip. Backstoppers helped ease the loan to $54.1 million from $63.3 million.
According to his Ethereum wallet’s transaction history today, Egorov deposited around 37 million CRV tokens, which translates to $22.2 million.
DeFi personalities played an instrumental role in keeping Curve Finance afloat, buying CRV tokens from Egorov. Among those who bought the tokens were:
- Tron Foundation CEO Justin Sun
- Power DeFi user DCF God
- Jeffrey Huang, otherwise known as Machi Big Brother
Helping hands
On-chain security firm PeckShield reported that Justin Sun exchanged 5 million CRV tokens worth $3 million from Egorov for $2 million in Tether’s USDT via direct over-the-counter trade, taking data from CoinGecko. He later confirmed the helping hand in a tweet.
“Excited to assist Curve!” he wrote. “As steadfast partners, we remain committed to providing support whenever needed. Our joint efforts will introduce an stUSDT pool on Curve, amplifying user benefits. Together, we aim to empower the community and forge a decentralized finance!”
PeckShield reported that Michael Egorov received $1 million in USDC and USDT from the Cream Finance multi-sig wallet. He also received an additional $1.5 million USDT from Jeffrey Huang (Machi Big Brother). Nansen analyst Sandra posted that Egorov transferred 50 million CRV tokens to other entities, including prominent DeFi user DCFgod and Web3 investment firm DWF Labs.
In summary, the total amount that Egorov sold on top of the deals by the helping hands was over 50 million CRV for $0.4 per token, generating nearly $20 million.
