Incident Overview
On June 25, 2025, Silo Finance lost approximately $545,000 due to an exploit in a testing-phase smart contract for an unreleased leverage feature. Core protocol contracts, including vaults and markets, remained unaffected, with only DAO-owned funds lost.
The attacker exploited a vulnerability in the openLeveragePosition function of an experimental smart contract deployed for testing. This function allowed user-controlled inputs, which the attacker manipulated to drain funds. The attacker funded their wallet through Tornado Cash and executed the exploit before the contract was paused.
Hypernative Labs detected the malicious code 3 minutes before execution, and Silo promptly responded by isolating the module, reassuring users that no external funds were at risk.
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 Silo, these are the critical security checks that could have prevented this incident (June 2025).
- 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.
Free TrialSecurity Audit History
- Audit Report 1 Report
Sources & References
Learn to Prevent the Next Silo
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