One of the most recent victims of the rapidly increasing attacks utilizing flash loans has been PancakeBunny, one of the most important and vital players in the DeFi landscape.
To provide some context, various DeFi, and BSC (Binance Smart Chain) protocols had been subjected to numerous cyber-attacks and hacking attempts in the past couple of months. The vast majority of these attacks were focused on exploiting various vulnerabilities utilizing flash loans. In perhaps the most notorious case, one hacker had managed to escape with about $200 million from the Binance Smart Chain exchange following some price manipulation. The team had officially stated that this was not necessarily a hack of the smart contracts but rather a glaring ‘economic exploit.’
‘No vaults compromised’
Despite the attacks, the team wanted to remind everyone that the vaults themselves had not been breached or compromised in any way. Still, this does not change the fact that the attacker had escaped with a substantial amount of money, $200 million to be exact (which included 114,000 BNB and about 700,000 BUNNY coins).
PancakeBunny nevertheless acknowledged this fact and is now expected to offer substantial consolation to the victims. As for the method of the attack itself, it had been revealed that the aforementioned hacker had utilized PancakeSwap in order to borrow a large portion of BNB prior to manipulating the USDT/BNB and the BUNNY/BNB pairs’ price. After the price was pumped, the attacker then dumped the BUNNY coins and let them accrue once again into the market, which resulted in a crash. He or she then repaid the Binance Coin flash loan.
All of the various aspects and complexities of the method of attack are still unknown, but it is anticipated that there shall be unveiled at a later date during a complete post mortem. Nevertheless, this entire situation resulted in BUNNY’s price dropping by a massive 95%, essentially causing a total collapse. Prior to the attack, the price had been about $170. However, it is now worth a mere $9.3.
The use of flash loans becoming more common for attacks
If there is one lesson that can be taken from this entire situation is that the usage of flash loans for the purposes of carrying out coordinated attacks such as these have definitely increased exponentially as of late.
This is mainly because flash loans enable considerable amounts to be successfully withdrawn before being utilized for wicked intentions and then being repaid in the exact same transaction.