Incident Overview
On September 18, 2025, the NGP token from NewGold Protocol was exploited for approximately $2 million, causing the token to crash 88% within one hour. The attacker used a sophisticated flash loan manipulation attack and deposited the stolen funds (443.8 ETH) into Tornado Cash for laundering.
The attacker executed a complex flash loan attack by borrowing $211 million to manipulate the NGP token's balance mechanics. The exploit targeted a flaw in NGP's transfer logic where 35% of any selling amount is deducted from the pool balance and synced. By flash loaning massive amounts and selling 1.36 million NGP tokens, the attacker reduced the NGP reserve value by 13.6 million times, from 477,000 to just 0.035 tokens.
This extreme manipulation broke the automated market maker's constant product formula (k=xy), allowing the exploiter to completely drain the victim pool while maintaining the appearance of legitimate trading activity. The attack demonstrates how poorly designed tokenomics can be exploited through large-scale market manipulation.
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 New Gold Protocol, these are the critical security checks that could have prevented this incident (September 2025).
- Verify all logic paths related to Flash Loan Attack are guarded by proper access controls and input validation - see the Flash Loans Attacks attack class for patterns
- 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 New Gold Protocol
The New Gold Protocol hack is one of many attacks that skilled auditors are trained to detect before deployment. Master real exploit patterns and defense techniques with hands-on Web3 security training.