header banner
Default

DeFi Exploit in Linear Finance Brings LUSD Stablecoin Down to Zero


Decentralized finance protocol Linear Finance has reported an attack that has resulted in liquidity being drained in its Linear USD (LUSD) token. It is the latest DeFi exploit in what has been a busy month for them so far. 

On September 21, Linear Finance reported that it was subject to an attack that resulted in the draining of all LUSD liquidity on both PancakeSwap and Ascendex.

DeFi Exploit Season

The attacker was able to mint an unlimited supply of LAAVE and subsequently traded the liquid asset to LUSD on the Linear Exchange. They then sold the tokens on PancakeSwap and Ascendex decentralized exchanges.

The team has halted all smart contracts and bridges on the protocol, it stated in a blog post. There have been no updates on the DeFi protocol’s X (Twitter) feed since the initial alert

The Linear Team said they have engaged an “industry-leading team to track the attacker(s) and bring them to justice.”

“Wallets known to have taken part in the exploit have been shared with all major exchanges and authorities. Restoring the protocol and un-doing the damage for our users will be our highest priority until the issue is fully resolved.”

There were no further details of the attack or the amount lost at the time of writing. 

The protocol supports cross-chain liquid and synthetic asset trading. It has a collateralized debt pool that allows users to deposit collateral to mint Linear USD, which is used to trade synthetic assets on the Linear Exchange.

The protocol is governed by the LINA token, which is used for voting and staking rewards. Furthermore, Linear Finance offers two main tokens: LINA is used for governance and staking, and LUSD is a stablecoin pegged to the US dollar used to trade synthetic assets.

LUSD Collapse 

VIDEO: Linear Finance DeFi Exploit Collapses LUSD Stablecoin to Zero
H D

According to DeFiLlama, Linear Finance’s total value locked is around $8 million. Moreover, it doesn’t appear to have tanked as a result of this DeFi exploit. 

The same cannot be said about the protocol’s stablecoin. LUSD collapsed to zero when the stablecoin liquidity pools were drained.

LUSD/USD 24 hours. Source: BeInCrypto
LUSD/USD 24 hours. Source: BeInCrypto

Remarkably, the protocol’s LINA token appears to be unaffected by the DeFi exploit. LINA was trading flat on the day at $0.011 at the time of writing. 

The DeFi token has actually gained 3.5% over the past week but remains down 96% from its March 2021 peak of $0.298.

Disclaimer

VIDEO: Linear Finance DeFi Exploit Collapses LUSD Stablecoin to Zero #cryptocurrency #defi #finance
CryptoHunter

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.

Sources


Article information

Author: Jason Spence

Last Updated: 1704327122

Views: 649

Rating: 3.9 / 5 (59 voted)

Reviews: 95% of readers found this page helpful

Author information

Name: Jason Spence

Birthday: 1945-12-07

Address: PSC 7698, Box 7892, APO AA 53012

Phone: +3718352050922985

Job: Computer Programmer

Hobby: Mountain Climbing, Skiing, Fishing, Stamp Collecting, Chess, Camping, Puzzle Solving

Introduction: My name is Jason Spence, I am a accessible, rare, unyielding, priceless, dazzling, Colorful, radiant person who loves writing and wants to share my knowledge and understanding with you.