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Cream Finance Builds a Compensation Plan After Encountering a Hack
Cream Finance is currently working on a refund process after hackers made away with $18 million. The DeFi protocol aims at compensating investors using 20% of its transaction fees. Cream also plans to clear the debt with Flexa Digital Payment and several AMP participants.
How Did it Happen?
On August 30, 2021, Peckshield discovered an exploit taking place at Cream Finance. According to the blockchain firm, the hack was successful because of a bug on the $AMP token.
The hacker starts by creating a flash loan worth 500 ETH and uses it as collateral. Using the bug, the cybercriminal re-borrows 355 ETH after initially borrowing 19 million $AMP. The process goes on with 17 different transactions causing the attacker to steal 462 AMP and 2800 ETH. This amount is equivalent to $18.8 million.
Cream assures users that it’s working closely with the authorities to find the attacker after the event. Users with valuable information concerning the suspect could also receive a portion of the funds after recovery.
Cream and AMP tokens’ value fell after the incident, registering a drop of 11% and 15%.
A Previous Attack
A similar attack took place before in February 2021. At that time, the attackers stole $37.5 million from Cream Finance. The hack was possible since the suspect took sUSD loans from IronBank. After depositing the funds back to IronBank, the hackers receive cySUSD in return.
By continuously manipulating Alpha Homora’s pools, the attackers took large amounts of WETH and USDC. Other amounts stolen from the attack include $5.6 million USDT and DAI worth $4.2 million. The price of Cream tokens dropped after the attack, causing a 40% dip.
About Cream Finance
Cream Finance operates as a lending protocol in the DeFi space. The platform introduces users to a money market ecosystem. Investors can distribute their holdings to Cream and borrow other assets after depositing. Cream Finance runs on Ethereum’s blockchain and plans to scale further to the BSC network.
The protocol’s primary goal is to feature crucial tokens that exist within the DeFi ecosystem. It lists stablecoins such as BUSD, yCRV, USDT, and USDC. Governance tokens such as SUSHI, COMP, BAL, and LEND are also available. At press time, the total value of locked assets in Curve Finance stands at $623.4 million.