How much was lost in the Kokomo Finance hack?

The Kokomo Finance hack resulted in $4.0M in losses on March 27, 2023.

What attack technique was used in the Kokomo Finance exploit?

The Kokomo Finance exploit utilized Drained Contracts. Understanding this attack vector is critical for smart contract auditors and developers building secure DeFi protocols.

How can developers prevent similar smart contract attacks?

Preventing smart contract hacks requires a combination of secure coding practices, thorough security audits, and understanding common attack vectors like reentrancy, oracle manipulation, and access control flaws. Smart Contract Hacking (SCH) provides hands-on training to help developers and auditors identify and prevent vulnerabilities before deployment.

Kokomo Finance Hack

TOTAL LOST $4.0M

Medium Mar 27, 2023 Drained Contracts optimism

Affected Chain optimism Incident surface

Recovered - No recovery reported

All-Time Rank #472 By amount stolen

Auditors 1 Prior security audit

Incident Overview

Kokomo Finance, an open source and non-custodial lending protocol on Optimism and Arbitrum.

Incident Report

Protocol / Project Kokomo Finance

Date of Incident March 27, 2023

Affected Chain(s) optimism

Attack Technique Drained Contracts

Classification Rugpull

Primary Source View Post-Mortem

Protocol Information

Protocol Type Lending

Smart Contract Language Solidity

Official Website koi.finance/

Protocol Twitter/X @KokomoFinance

Market Context at Time of Hack

Token Categories

Decentralized Exchange (DEX) Token DeFi Privacy Ethereum Ecosystem AMM zkSync Era Ecosystem DWF Labs Portfolio

Protocol Links

Discord

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 drained contracts and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

On-Chain Access Ability to interact with optimism smart contracts and deploy a custom exploit contract

Protocol Analysis Identification of the exploitable vulnerability in Kokomo Finance's contract logic - root cause: rugpull

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 Drained Contracts audit checklist and test coverage

Audited by Audit Report 1 — still lost $4.0M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Kokomo Finance, these are the critical security checks that could have prevented this incident (March 2023).

Verify all logic paths related to Drained Contracts 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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Security Audit History

Audit Report 1 Report

Sources & References

01
Source 1 https://x.com/CertiKAlert/status/1640118618548568069

Threat Assessment

Severity Level

MEDIUM

Attack Vector Drained Contracts
Root Cause Rugpull
Year 2023

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