How much was lost in the Nerve Finance hack?

The Nerve Finance hack resulted in $586K in losses on November 14, 2021.

What attack technique was used in the Nerve Finance exploit?

The Nerve Finance exploit utilized Other. 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.

Nerve Finance Hack

TOTAL LOST $586K

Low Nov 14, 2021 Other

Affected Chain 2021 Incident surface

Recovered - No recovery reported

All-Time Rank #966 By amount stolen

Auditors 1 Prior security audit

Incident Overview

The attacker:

https://bscscan.com/address/0xd5476194…d69228

The transaction behind the attack:

https://bscscan.com/tx/0xea95925e…6fcf1d

The attacker:

- borrowed 50,000 BUSD using a flash loan from Fortube

- swapped 50,000 BUSD for 50,351 fUSDT from Ellipsis

- invoked the swap function of MetaSwap to swap 50,351 fUSDT for 36,959 Nerve 3-LP with a relatively big slippage

- invoked the removeLiquidityOneCoin() function of Nerve.3pool with the LP tokens (received in the previous step) to remove the liquidity of BUSD, i.e., 37,071 BUSD

- invoked the swapUnderlying() function of MetaSwap to swap BUSD for fUSDT, and received 51,494 fUSDT.

The attacker repeatedly executed the above steps to drain the liquidity of the MetaPool and finally harvested 900 BNB.

Stolen funds were deposited into Tornado Cash mixer:

https://bscscan.com/tx/0xcf43eefb…0aec90

https://bscscan.com/tx/0x55bd06a0…190a53

https://bscscan.com/tx/0x2dbc18c6…23067b

https://bscscan.com/tx/0x17cd04cb…334e7c

https://bscscan.com/tx/0xe5a0a058…4fa1f4

https://bscscan.com/tx/0x16ec28d4…896581

https://bscscan.com/tx/0x7f6b4313…0bb3c1

The rest were bridged though AnySwap:

https://bscscan.com/tx/0x0348cc92…2332a6

The swap function ignores the impact of the virtual price, which means the value of the LP token will be underestimated and more LP tokens could be swapped out. As a result, it is possible to harvest more pool stablecoins by first fetching back the liquidity of the underlying stablecoins with the corresponding LP token, and then swapping pool stablecoins by invoking the swapUnderlying() function.

Incident Report

Protocol / Project Nerve Finance

Date of Incident November 14, 2021

Attack Technique Other

Classification Exchange (DEX)

Primary Source View Post-Mortem #1 View Post-Mortem #2

Protocol Information

Protocol Type Lending

Affected Token NRV

Official Website nerve.fi/

Protocol Twitter/X @NerveFinance

Team Anonymous

Source Code Unverified

Market Context at Time of Hack

Token Categories

DeFi Yield Farming AMM DEX Three Arrows Capital Portfolio BNB Chain Ecosystem

Protocol Links

Discord Telegram

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 Nerve Finance's contract logic - root cause: exchange (dex)

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

Audited by Audit Report 1 — still lost $586K. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to Nerve Finance, 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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Security Audit History

Audit Report 1 Report

Sources & References

01
Source 1 https://halborn.com/explained-the-synapse-and-nerve-bridge-hacks…
02
Source 2 https://blocksecteam.medium.com/the-analysis-of-nerve-bridge-sec…

Threat Assessment

Severity Level

LOW

Attack Vector Other
Root Cause Exchange (DEX)
Year 2021

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