Swerve Finance Hack

TOTAL LOST —
Other

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2023 Incident surface
Recovered - No recovery reported
Same Technique 415 Total incidents
Protocol Type Yield Target category

Incident Overview

Quick Summary

Swerve Finance's pool was targeted via governance attack which might cause a loss of 1,337,000 $USD

Details of the Exploit

Swerve Finance, a defunct clone of Curve Finance, was targeted in a governance exploit attempt. The attacker created a proposal to transfer 1,337,000 $USD from the DAI-USDC-USDT pool to their address. Initially, the attacker had 348,000 $SWRV tokens and later gained another 102,000 $SWRV tokens to control enough power for their proposal to pass. However, it is still ongoing as they lack sufficient combined power.

The party behind the attack claims that it was a white hat effort to claim admin fees worth 120,000 $USD and that exploiting the protocol's vulnerability was accidental.

This incident highlights how decentralized governance mechanisms can protect large sums but also demonstrates potential vulnerabilities when projects are abandoned or handed over without proper consideration for security measures such as transferring ownership of the project's null address which could provide better protection against malicious takeover attacks.

Block Data Reference

Attacker address:

https://etherscan.io/address/0xcdedb901…186ca7

Malicious transaction:

https://etherscan.io/tx/0x4c612aea…75a2fa

Incident Report

Protocol / Project Swerve Finance
Date of Incident
Attack Technique Other
Classification Exchange (DEX)
Primary Source View Post-Mortem #1 View Post-Mortem #2

Protocol Information

Protocol Type Yield
Affected Token SWRV
Official Website swerve.fi/
Protocol Twitter/X @SwerveFinance
Team Anonymous
Source Code Verified On-Chain

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 Swerve 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

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

  • 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

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Sources & References

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