Incident Overview
Seven of Rari's Fuse pools were drained due to re-entrancy attack. The total amount of losses is ~$80m.
Rari enables the creation of so-called Fuse Pools permissionless lending pools that anyone with a wallet can access from anywhere to lend or borrow ERC-20 tokens.
The attack drained Rari's pools while Rairy's pools were unaffected. Fei Rari uses a fork of the Compound code that doesn't follow the check-effect-interaction pattern which the attacker took advantage making a re-entrancy attack via CEther which uses call.value to send ETH.
Attack flow:
1) Attacker flash loaned 150m USDC and 50k WETH
2) Deposited 150m USDC as collateral into fUSDC-127 contract for loans. This contract is a fork of vulnerable smart-contract of Compound protocol.
3) The attacker borrows 1,977 ETH via borrow() function
4) As the borrow() function does not follow the check-effect-interaction pattern and transfers ETH to the attacker’s contract before updating the attacker’s borrow records.
5) As the attacker’s borrow record not updated, the attacker made a re-entrant call to exitmarket() that allows the attacker to withdraw his collateral.
The attacker repeated the following actions, repaid the flash loan, and kept the remaining profit for himself.
Funds lost:
ETH - 6 037.81
FEI - 20 251 603.11
DAI - 14 278 990.68
LUSD - 1 948 952.18
USDC - 10 055 556.33
USDT - 132 959.90
RAI - 31 615.87
FRAX - 13 101 364.94
UST - 2 765 891
Total lost in USD: 79 749 026$
Update 22.09.2022:
Tribe DAO which is a conglomerate of Midas Capital, Rari Capital, Fei Protocol and Volt Protocol has passed an on-chain vote with 99% consent to fully reimburse the $80m in losses victims suffered in the Rari capital exploit.
Attacker Address: https://etherscan.io/address/0x6162759e…66157F
Attack transactions:
ETH: https://etherscan.io/tx/0xab486012…e76530
Arbitrum: https://arbiscan.io/tx/0x3212d091…3203ef
Attacker contracts:
1) https://etherscan.io/address/0xE39f3C40…8a2bc1
2) https://etherscan.io/address/0x32075bad…d36c45
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 Rari Fuse, these are the critical security checks that could have prevented this incident (April 2022).
- Verify all logic paths related to Reentrancy are guarded by proper access controls and input validation - see the Reentrancy attack class for patterns
- Check that all state-changing functions follow the Checks-Effects-Interactions (CEI) pattern to prevent reentrancy and logic ordering bugs
- 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 TrialFunds Recovery
Recovered
$79.7M
Net Loss
0
Related Attack Classes
The technique used in this hack maps to these vulnerability classes in our security curriculum:
Sources & References
- 01
- 02
- 03
- 04
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