Incident Overview
On May 25, 2026, the WUSD.fi / GLOVE incentive program on Ethereum was exploited for approximately $207,000. The stolen liquidity was subsequently swapped for roughly 98 ETH and laundered via the Railgun privacy protocol.
The vulnerability was a classic sybil abuse flaw within the protocol's reward distribution logic. The WUSD._englove function allowed any address that wrapped at least 100 WUSD, while holding fewer than 2 GLOVE, to mint up to 2 GLOVE tokens. Because the protocol lacked sybil resistance, the attacker used EIP-7702 helper contracts and Morpho flash loans to automate the creation of numerous fresh addresses.
This allowed them to repeatedly execute wrap/unwrap cycles to harvest GLOVE tokens at scale. The attacker then dumped the farmed GLOVE into Uniswap V3 liquidity pools, draining the underlying USDC and USDT reserves before swapping the proceeds for ETH.
Incident Report
Protocol Information
Market Context at Time of Hack
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 WUSD.fi, these are the critical security checks that could have prevented this incident (May 2026).
- 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:
Proof-of-Concept Exploits
On-Chain Evidence & References
- Twitter/X Alert https://x.com/exvulsec/status/2058803971947385330
Sources & References
Learn to Prevent the Next WUSD.fi
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