Formation.Fi Hack

TOTAL LOST $100K
Low Other

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2021 Incident surface
Recovered - No recovery reported
All-Time Rank #1525 By amount stolen
Protocol Type Exploit/Other Target category

Incident Overview

The attacker:

https://etherscan.io/address/0x89640eb6…0e3ae1

The transaction behind the attack:

https://etherscan.io/tx/0x5c9ac39c…afb6ab

The attack contract:

https://etherscan.io/address/0xb5aef637…b1711e

Affected contracts:

https://bscscan.com/address/0xe2ee850d…3f0012

https://etherscan.io/address/0x62931dec…08334b

The farming contract has been using the balance of the pool for price discovery of the FORM token and LP token in order to calculate the USD (stable coin) value of the position and pay rewards accordingly.

The Flash Swap mechanism allows to alter the price of the FORM token — the exploit contract used that in order to excessively increase the value of the reward calculated at the withdrawal transaction.

The attacker:

- staked LP tokens.

- pulled available funds from the pool, unstaked LP token, and sent back funds to the pool.

Further exploitation was prevented by devs by setting the multiplier to 0, which makes the contract send no FORMs for any new staked LP tokens:

https://etherscan.io/tx/0x9aad3091…63efc8

Incident Report

Protocol / Project Formation.Fi
Date of Incident
Attack Technique Other
Classification Yield Aggregator
Primary Source View Post-Mortem

Protocol Information

Protocol Type Exploit/Other
Affected Token FORM
Official Website app.formation.fi/
Protocol Twitter/X @formationfi
Team Anonymous
Source Code Unverified

Market Context at Time of Hack

Protocol Links

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.

Technical Knowledge Deep understanding of other and Solidity and EVM internals
Capital Required Seed capital to cover gas and initial position setup
On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract
Protocol Analysis Identification of the exploitable vulnerability in Formation.Fi's contract logic - root cause: yield aggregator
Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block
Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Other audit checklist and test coverage

If you're auditing a protocol with similar architecture to Formation.Fi, these are the critical security checks that could have prevented this incident (November 2021).

  • Verify all logic paths related to Other are guarded by proper access controls and input validation
  • 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.

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Sources & References

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