How much was lost in the Magnate Finance hack?

The Magnate Finance hack resulted in $6.4M in losses on August 25, 2023.

What attack technique was used in the Magnate Finance exploit?

The Magnate Finance exploit utilized Drained Contracts / Rugpull. 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.

Magnate Finance Hack

TOTAL LOST $6.4M

Medium Aug 25, 2023 Drained Contracts / Rugpull base

Affected Chain base Incident surface

Recovered - No recovery reported

All-Time Rank #391 By amount stolen

Auditors 1 Prior security audit

Incident Overview

Quick Summary

Magnate Finance exit scammed, removing various assets worth 5,357,862 $USD, causing a drop in TVL of approximately 6,400,000 $USD.

Details of the Exploit

Magnate Finance, a borrowing and lending platform running on Base chain, experienced a significant exploit on Aug 25, 2023. The deployer removed various assets from Magnate Finance's smart contract with unverified source code. The funds were transferred and bridged via Stargate to various chains including Arbitrum, Ethereum, Optimism, and Binance Smart Chain, and then swapped to DAI or ETH to prevent freezing of the funds. The confirmed loss from the project's smart contract is 5,357,862 $USD, while the total value locked (TVL) of Magnate Finance dropped by approximately 6,400,000 $USD.

Losses include:

1,557,255 $USD worth 946.66 ETH

2,051,576 USDC

1,341,285 DAI

407,746 $USD worth 247.87 WETH

Block Data Reference

Scammer Address:

https://basescan.org/address/0xa146dffe…5ce6e1

Funds Holders as of August 26:

https://bscscan.com/address/0x0664FAf5…8006A3

https://bscscan.com/address/0x2f3801ac…44D0Cb

https://arbiscan.io/address/0x7B53eC7E…91FA33

https://etherscan.io/address/0x4f2b2290…C0E2b3

https://arbiscan.io/address/0x06D3930F…41DBE8

https://optimistic.etherscan.io/address/0xD85ac6Af…457820

Malicious Transaction:

https://basescan.org/tx/0x39555e75…02f719

Incident Report

Protocol / Project Magnate Finance

Date of Incident August 25, 2023

Affected Chain(s) base

Attack Technique Drained Contracts / Rugpull

Classification Rugpull / Borrowing and Lending

Primary Source View Post-Mortem

Protocol Information

Protocol Type Lending

Affected Token MAG

Smart Contract Language Solidity

Official Website magnate.finance/

Protocol Twitter/X @MagnateFi

Team Anonymous

Source Code Unverified

Market Context at Time of Hack

Token Categories

Ethereum Ecosystem Avalanche Ecosystem Polygon Ecosystem Fantom Ecosystem Arbitrum Ecosystem Cross-Chain BNB Chain Ecosystem Optimism Ecosystem

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 / rugpull and Solidity and EVM internals

Capital Required Seed capital to cover gas and initial position setup

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

Protocol Analysis Identification of the exploitable vulnerability in Magnate Finance's contract logic - root cause: rugpull / borrowing and lending

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? Hard to catch — private key / OpSec failures are outside smart contract audit scope

Audited by Audit Report 1 — still lost $6.4M. Prior audits don't guarantee safety, especially after post-audit code changes.

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

Verify all logic paths related to Drained Contracts / Rugpull 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://twitter.com/PeckShieldAlert/status/1694946221788729440
02
Reference https://twitter.com/PeckShieldAlert/status/1694946221788729440?s=20
03
Reference https://twitter.com/zachxbt/status/1694914871165345997

Threat Assessment

Severity Level

MEDIUM

Attack Vector Drained Contracts / Rugpull
Root Cause Rugpull / Borrowing and Lending
Year 2023

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