Radiant Capital Suspends Operations on Arbitrum Following $4.5 Million Exploit

The post Radiant Capital Suspends Operations on Arbitrum Following $4.5 Million Exploit appeared first on Coinpedia Fintech News

In a recent high-profile security incident, Radiant Capital, a prominent cross-chain lending protocol, has temporarily suspended its lending and borrowing markets on the Arbitrum network. This move comes in the wake of a sophisticated $4.5 million exploit (equivalent to 2337 ETH) targeting its newly launched USDC Coin (USDC) markets.

Details of the Attack

The exploit, confirmed by Radiant developers in collaboration with the cybersecurity community, was identified as a flash loan attack. It originated from a rounding issue within the protocol’s codebase. Beosin, a blockchain security firm, detailed that a cumulative precision error arose due to this rounding glitch.

The attacker manipulated an index parameter, causing a significant inflation in its value, which led to a cumulative precision error during the deposit() and withdraw() operations. This error allowed the attacker to profit substantially within a very short period.

PeckShield’s Analysis

Another analytics firm, PeckShield, linked the exploit’s mechanism to a vulnerability in the existing Compound/Aave codebase. It was triggered when a new market was added to the lending platform. The firm pinpointed that the USDC market was exploited just six seconds after its activation, calling for more stringent measures during the activation of new markets.

Radiant Capital’s Response

In reaction to this security breach, Radiant Capital has halted its Arbitrum operations. They have reassured users that no additional funds are at risk and have committed to a thorough investigation. The platform, known for allowing users to trade assets across various blockchains, stated that operations would resume post-investigation.

Conclusion

This incident underscores the vulnerabilities inherent in decentralized finance (DeFi) platforms and the importance of robust security protocols. As the crypto ecosystem continues to expand, such events serve as stark reminders of the challenges DeFi protocols face in safeguarding against hacker attacks. Radiant Capital’s response and subsequent actions will be closely monitored by the crypto community as it seeks to recover from this significant setback.