Finance Redefined: DeFi Vulnerabilities and Exploits

Unprecedented Chain of Events Unfolds in DeFi

Last week, a malicious actor exploited a vulnerability in the Ledger hardware wallet's connector library, putting the entire decentralized application (DApp) ecosystem at risk. Users were advised by on-chain analysts and DApps like SushiSwap and MetaMask to avoid interacting with their wallets altogether. Ledger quickly released a patch, but the attacker still managed to drain over $650,000 from multiple victims.

How the Ledger Connect Hacker Fooled Users

The "Ledger hacker" who stole at least $484,000 from various Web3 apps on Dec. 14 used a phishing exploit to trick users into making malicious token approvals, according to blockchain security platform Cyvers. The attack occurred after the hacker gained access to a former Ledger employee's node package manager javascript account.

Ledger Patches Vulnerability After DApps Compromised

Multiple decentralized applications (DApps) using Ledger's connector were compromised, including Zapper, SushiSwap, Phantom, Balancer, and Revoke.cash. Ledger replaced the malicious file with the genuine version, urging users to "always Clear Sign" transactions and verify the information on their Ledger device matches their computer or phone screen.

Yearn.finance Seeks Return of Funds After Multisig Mishap

Decentralized finance protocol Yearn.finance suffered a $1.4 million loss due to a multisignature scripting error that drained a significant portion of its treasury. The protocol is now requesting that arbitrage traders return the funds.

OKX DEX Hacked for $2.7 Million

OKX decentralized exchange (DEX) experienced a $2.7 million hack after the private key of the proxy admin owner was leaked. The incident occurred after the owner upgraded the DEX proxy contract, allowing the hacker to steal tokens.

DeFi Market Overview

The top 100 DeFi tokens had a bullish week, with most trading in the green on the weekly charts. The total value locked into DeFi protocols remained above $60 billion.

Thank you for reading our summary of this week's most important DeFi developments. Join us next Friday for more stories, insights, and education on this rapidly evolving space.