Incident Overview
An attacker exploited dYdX, Aave v2, Compound, and Curve in a complex flash loan attack, resulting in a significant manipulation of funds.
The attacker initiated the exploit by flash loaning 116k ETH from dYdX and 99k ETH from Aave v2. They then borrowed 134M USDC and 129M DAI using the loaned ETH as collateral on Compound. The attacker added these funds to the 3crv Curve pool and withdrew 165M USDT.
This process was repeated five times, each time depositing less DAI to the yDAI vault and withdrawing less DAI from it. In the final iteration, the attacker withdrew 39M DAI and 134M USDC instead of USDT. The attacker then repaid the debts on Compound and the flash loans on dYdX and Aave v2.
The attacker's transactions:
https://etherscan.io/tx/0x59faab5a…0da98b
https://etherscan.io/tx/0xf6022012…b30779
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 Yearn Finance, these are the critical security checks that could have prevented this incident (February 2021).
- Verify all logic paths related to Flashloan Price Oracle Attack / Flash Loan Attack are guarded by proper access controls and input validation - see the Flash Loans Attacks attack class for patterns
- Audit oracle price feeds for manipulation risks - ensure time-weighted average prices (TWAPs) or multi-source aggregators are used, not spot prices
- 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
$1.7M
Net Loss
9295000
Security Audit History
- Audit Report 1 Report
Related 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
Sources & References
Learn to Prevent the Next Yearn Finance
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