UwU Lend Hit Again: $3.5M Stolen in Second Hack
In A Nutshell
The UwU Lend protocol, initially compromised for nearly $20 million in June, has suffered a second attack during its ongoing reimbursement endeavor to hack victims. This recent breach resulted in a theft of $3.5 million from various asset pools, utilizing a similar exploit mechanism to the first. Despite efforts to secure the protocol post-first attack, the exploiters capitalized on the remaining vulnerabilities to execute another significant heist.
Details of the Second Exploit
According to Onchain data analytics firm Cyvers, the second attack on UwU Lend mirrored the tactics of the first, leading to a loss of $3.5 million in cryptocurrencies including uDAI, uWETH, uLUSD, uFRAX, uCRVUSD, and uUSDT. The stolen assets were converted to Ethereum (ETH) and traced to the assailant’s wallet. This breach unfolded merely days after the protocol initiated the reimbursement process for the first exploit’s victims.
Insight into the First Exploit
The initial breach of UwU Lend was attributed to price manipulation strategies involving flash loans and arbitrage between USDe and other tokens, which ultimately inflated the value of borrowed tokens through the lending platform. This manipulation allowed the attackers to siphon nearly $20 million in assets, which were subsequently converted to ETH.
Response and Reimbursement Efforts
Following the first attack, UwU Lend acted promptly to address the vulnerability associated with the USDe market oracle, which was identified as the exploit’s entry point. The protocol announced the successful reimbursement of over $9.7 million to the victims of the initial hack, including a significant repayment in the Wrapped Ether (wETH) market.
Analysis of the Vulnerability
Crypto security firm CertiK clarified that the second exploit did not arise from a new vulnerability but was a direct consequence of the first exploit. The attackers had retained a quantity of sUSDE tokens from the first attack, which they then used as collateral in the UwULend protocol to drain additional funds. This aspect underscores the complex challenges in completely securing DeFi protocols post-exploit.
Our take
The repeated attacks on UwU Lend highlight a persistent risk in the DeFi ecosystem, emphasizing the importance of comprehensive security measures and rapid response strategies. While the protocol’s efforts to reimburse affected parties demonstrate a commitment to accountability, the successful execution of a second exploit signifies an urgent need for enhanced security protocols and continuous vigilance. The incident serves as a crucial reminder for DeFi platforms to rigorously assess and fortify their systems against evolving threats, ensuring the trust and safety of users’ assets.
