Euler Finance, a lending protocol that facilitates crypto lending and borrowing, has suffered a flash-loan attack resulting in a loss of $197 million, according to security firms BlockSec and PeckShield.
Quoting the blockchain security firms, The Block reported that the attack took place at 4:50 am ET and involved the siphoning off of $136 million worth of staked Ether (CRYPTO: STETH), $34 million worth of USD Coin (CRYPTO: USDC), $19 million worth of Wrapped Bitcoin (CRYPTO: WBTC), and $8.7 million worth of DAI (CRYPTO: DAI) from the protocol.
The identity of the perpetrator and the method of attack remains unknown.
Euler Finance's team is collaborating with security professionals and law enforcement to gather more information, which they will release to the public later.
The use of flash loans is a common tactic among attackers who seek to exploit vulnerabilities in DeFi protocols by accessing large amounts of funds without providing collateral.
However, flash loans carry a high level of risk, as the borrower must repay the loan within a short time frame.
Euler Finance is a non-custodial protocol that operates as a decentralized autonomous organization (DAO), enabling users to lend and borrow crypto assets.
In June 2022, Euler Finance raised $32 million in a fundraising round led by Haun Ventures.
The impact of the attack on Euler Finance was significant, as the price of its token EUL (CRYPTO: EUL) plummeted over 45%, dropping from $6.10 to $3.30.
The team at Euler Finance said it is working to address the breach and prevent similar attacks in the future.
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