Incident Overview
On February 10th, the dForce protocol was exploited, and the attacker made a profit worth 3.65 million dollars.
On February 10th, the DeFi aggregator platform dForcenet was attacked and the attacker made a profit of approximately $3.65 million. The attacker used flashloans to borrow WETH and swapped it into ETH, then added liquidity to the wstETH/ETH pool on Curve, earning wstETHCRV tokens. They deposited some of the tokens in the Curve wstETHCRV-gauge, receiving wstETHCRV-gauge tokens, which were used to deposit in the dForce wstETH/ETH Vault and mint share tokens and USX tokens.
The attacker then removed liquidity using the remove_liquidity function, which triggered the fallback function of the attack contract, ultimately decreasing the virtual price in the wstETH/ETH pool. The attacker then liquidated other users in the dForce wstETH/ETH Vault, profiting from the manipulated virtual price. The hacked funds are still in the attacker's address as of now.
The root cause was the attacker's exploitation of the process of transferring native tokens before burning LP when removing liquidity in the wstETH/ETH Pool, triggering the callback for receiving native tokens to manipulate virtual prices and liquidate other users for profit.
Exploit TXs:
https://optimistic.etherscan.io/tx/0x6c197621…bfba0d
https://phalcon.blocksec.com/tx/arbitrum/0x5db5c240…5171dd
Incident Report
Protocol Information
What the Attacker Needed to Succeed
Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.
What Auditors Should Check
If you're auditing a protocol with similar architecture to dForce, these are the critical security checks that could have prevented this incident (February 2023).
- Verify all logic paths related to Oracle Issue are guarded by proper access controls and input validation - see the Oracle Manipulation & Price Manipulation attack class for patterns
- Audit oracle price feeds for manipulation risks - ensure time-weighted average prices (TWAPs) or multi-source aggregators are used, not spot prices
- Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs
Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.
Free TrialRelated Attack Classes
The technique used in this hack maps to these vulnerability classes in our security curriculum:
Sources & References
Learn to Prevent the Next dForce
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