Incident Overview
On November 14, 2024, the vETH token suffered an exploit caused by a flaw in the business logic of its smart contract, resulting in a loss of approximately $450,000.
The vulnerability stemmed from a flaw in the vETH token’s takeLoan function, which could be triggered by an authorized factory contract. This factory contract was meant to add liquidity to the Uniswap vETH-BIF pair using borrowed vETH and the user’s BIF tokens. However, the attacker manipulated the liquidity pool during this process by borrowing vETH without proper constraints.
This allowed them to alter the pool's constant (x * y = k) and drain vETH without incurring the full cost, leading to substantial financial losses.
Attacker:
https://etherscan.io/address/0x713d2b65…559dd1
Victim contract:
https://etherscan.io/address/0x280a8955…39ac2e#code
Incident Report
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 vETH, these are the critical security checks that could have prevented this incident (November 2024).
- 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 vETH
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