Yearn Finance Suffered Attack, nearly $11M Drained

February 5, 2021

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Yearn Finance has suffered an attack in one of its DAI lending pools, as per the decentralized finance or DeFi’s protocol’s official Twitter handle. An Aave flash loan was utilized to trigger the vault draining, as per an ETH address presumed to be related to the attack.

Yearn Finance one of the top venues in DeFi, popular for always allowing the depositors to recoup all their yield in the token they deposited initially. Yearn recently has $500M worth of assets invested in it, as per the DeFi pulse. However, even on version 1, its several pools earn an annual yield of almost 20%. The platform recently updated to the latest suite of vaults, but just like any other smart contract platform, previous smart contracts remained.

Clients in the Yearn Discord and Telegram stations started reporting drains on Thursday evening. At 4:38 p.m. ET in the Yearn Discord server, Jeffrey Bongos composed, anyone, know why v1Dai vault is demonstrating that I’ve lost a large number of Dai over the most recent couple of minutes?

At a brief time after 5 p.m. ET, the front end of the v1 DAI vault on the Yearn site demonstrated a loss of 1059%. Yearn’s YFI administration token had a value drop of $4,000 on the news. Soon after the attack became public, the UniWhales Twitter account detailed a large sale of YFI for ETH. The vault attacked was Yearn’s v1 DAI vault, which refreshed to another investment strategy a month ago, as per a blog entry posted by the Yearn group on January 23.
The vault’s strategy at the hour of the attack was to deposit all assets into the 3pool on the automated market maker (AMM) Curve. Curve’s 3pool contains USDT, USDC, and DAI, permitting clients to trade any of the stablecoins for another at exceptionally low slippage.

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