On Thursday, decentralized finance, or DeFi, protocol Team Finance said that more than $14.5 million worth of tokens were exploited through the Uniswap V2 to V3 migration feature on their platform. According to blockchain security company PeckShield, the hacker transferred liquidity of Uniswap V2 assets on Team Finance to a V3 pair controlled by him with biased prices. By locking the tokens in the contract, the attacker bypassed the existing validation mechanisms and pocketed the huge leftovers as a refund for profit.
Uniswap V3 was designed more efficiently for Liquidity Providers (LPs) than V2 on its decentralized exchange. However, the V2 smart contracts are still operational, and users must interact with a migration smart contract to migrate their LP assets from V2 to V3. PeckShield estimates that the initial attack vector required for this interaction cost just 1.76 Ether (ETH).
Drained assets include USD Coin, CAW, TSUKA, and KNDA tokens, as liquidity pools were “moved” to Uniswap V3. On the decentralized exchange, some of the affected tokens, such as CAW, suffered sharp price drops due to the exploit and subsequent liquidity crisis.
Team Finance says that the smart contract had previously been audited and urged the hacker to “contact us for a reward payment.” As a result, the developers have temporarily paused all activity on the protocol and claim that all funds on the platform are not at risk from a new exploit. Founded in 2020, Team Finance and its parent company TrustSwap provide token liquidity locking and vesting services for project executives. The protocol claims to have $3 billion secured across 12 blockchain networks.
With vesting periods longer than Liz Truss’ employment history… https://t.co/1Wo6RwqsFg can keep you safer than the British economy this winter!
Lock your tokens today and keep the Truss away. pic.twitter.com/QYPhjg7HQo
— Team Finance (@TeamFinance_) October 21, 2022
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information set forth herein should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Keep reading:
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.