The newly hacked DeFi protocol Warp Finance is gearing up for a restart and integrates Chainlink oracles to prevent future potential fast credit attacks.
In mid-December, Warp Finance came under attack using quick loans. The hacker was able to withdraw stablecoins worth $ 7.7 million from the platform. According to the Warp Finance developers, the addition of Chainlink oracles will protect against similar attacks in the future.
The quick credit attack involves borrowing collateral and returning it in a single transaction after using it to manipulate the price. According to the Warp Finance team, security experts have determined that the main reason for the hack was a price oracle.
The problem was compounded by the fact that Warp Finance uses tokens from liquidity providers as collateral. This feature is one of the main arguments in favor of the protocol, as it allows income-generating tokens to be transferred as collateral, combining both the income from trading commissions and borrowers using the protocol.
According to DeFi “white hacker” Emiliano Bonassi, the protocol vulnerability was that the Warp Finance oracles miscalculated the base value of the pool tokens. The updated version of the protocol will use Chainlink price oracles for all critical functions, such as determining the value of the LP tokens used for collateral.
Earlier, Chainlink and its founder Sergey Nazarov have repeatedly stated the need for the widest possible use of price oracles in the cryptocurrency market. A Warp Finance spokesman commented on the situation and the question of why the protocol hasn’t previously used Chainlink’s decentralized oracles:
“The Uniswap oracles have been an option for many projects that need pricing information for different use cases. Thus, we launched the test phase of the project, like other lending platforms, with the possibility of updating later. ”
The spokesperson also noted that a significant portion of DeFi projects do not use Chainlink and they believe that the protocol restart “will give our users a lot more confidence in the security of our application.”
Warp Finance has also developed a compensation plan for hacked users and has recovered 75% of the stolen crypto assets as of the end of December.
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
