Solana network’s Crema loses $8.78M to flash loan exploit

solana network
TL;DR Breakdown
  • Solana-based liquidity protocol loses $8.78 million.
  • Solana network hacker exploited a command.
  • Solana (SOL) has dropped 20% in price since June 27.

Solana-based liquidity protocol Crema Finance resulted in the loss of about $8.78 million worth of cryptocurrencies in a hack, according to developers.

According to the firm, it halted its smart contract after the exploit. The protocol enables liquidity providers to establish price ranges, add single-sided liquidity, and conduct range order trading. This is a sophisticated and decentralized trading platform with all of the tools you need.

The developers said in a tweet that they’ve been working with “a number of competent security institutions and relevant bodies” to monitor the hacker’s cash movements.

Following the exploit, DATA shows that the price of a Bitcoin locked on Crema dropped to $3 million on Monday, from more than $12 million over the weekend. Since its inception in January, Crema has seen trading volumes of 1.34 billion dollars.

Solana network hacker exploited a command

The attacker started by establishing a phony tick account. The creators described the term “tick account” as “a specific account that saves price tick data in Crema’s market-making platform.” Following that, the hacker exploited a command by putting the data on the fake account, outsmarting security safeguards.

The hacker manipulated asset prices on liquidity pools using a flash loan. This, together with the forged data entries, allowed the intruder to claim “a large pool payment” from the pool.

Flash loans allow traders to borrow unsecured loans from lenders by relying on smart contracts instead of third parties.

The stolen funds were converted to 69422.9 Solana (SOL) and 6,497,738 USD Coin (USDC). The SOL-based USDC was then crossed over to the Ethereum network via Wormhole and exchanged for 6,046 ether (ETH). At current prices, these assets amount to more than $8.5 million.

Solana (SOL) down 20% in 7 days

Solana (SOL) has dropped 20% in price since June 27. According to CoinMarketCap, Solana is the hardest-hit crypto project in the top 10 by market capitalization, with a huge weekly reduction of one-fifth of its already severely depressed price.

On Monday, SOL was trading at $41.25. For a week, it has been falling swiftly and closing the session in red candles each day. On July 2, when it fell by 25%, it had reached its maximum pain of $30.92, which represented a 25% drop from the beginning of the week.

After a modest 5% decline, the token proceeded into a sideways drift to late summer 2021 levels and is now priced at $32.9.

Solana’s capitalization was reduced by $2.7 billion to $11.3 billion, allowing the project to keep ninth place in the top 10 but not enough to prevent DOGE from slipping.

At the moment, at least Cardano (ADA) and XRP, if not Binance Coin (BNB), are in advance with a gap of 4 billion. Ethereum’s ($128 billion) position as the final boss appears to be out of reach for SOL presently.

John Lincoln

John Lincoln

Lincoln contributes blockchain and crypto perspectives that meet the industry's selective information needs in a timely, undiluted fashion. His greatest wish is to share transformational technology through an engaging and easy-to-read style, making complex topics accessible to all.

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