DeFi sees exploits and exit scam drama in the last week of 2022: Finance Redefined
Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you significant developments over the last week.
For DeFi, the last week of 2022 saw another slew of exploits, insider job accusations and exit scam drama. It all started on Christmas, when Defrost Finance, a decentralized leveraged trading platform on the Avalanche blockchain, was exploited by a DeFi flash loan attack causing $12 million in losses.
However, the hacker behind the attacks reportedly returned a portion of the funds the next day. Security analytic firm Certik looked into the chain of events and concluded that the $12 million of funds drained were a part of an exit scam.
On Dec. 26, when the Defrost exploit saga was unfolding, Bitkeep, a multichain wallet, was exploited for $8 million by hackers. Later in an analysis report, it emerged that exploiters lured users through phishing websites.
The top 100 DeFi tokens had another bearish week with little to no price momentum. Nearly all tokens were trading in red on the weekly charts.
This week, Defrost Finance announced that both its versions — Defrost v1 and Defrost v2 — are being investigated for a hack. The announcement came after investors reported losing their staked Defrost Finance (MELT) and Avalanche (AVAX) tokens from MetaMask wallets.
After a few users complained about the unusual loss of funds, Defrost Finance’s core team member Doran confirmed that Defrost v2 was hit with a flash loan attack. At the time, the platform believed Defrost v1 was not impacted by the hack and decided to close down v2 for further investigation.
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Defrost Finance, the decentralized trading platform that suffered a $12 million exploit in
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