Avalanche-backed borrowing protocol DeltaPrime suffers $4.5m hack
Decentralized borrowing protocol DeltaPrime has reportedly suffered a multi-million dollar hack, with suspicions pointing to entities linked to North Korea.
DeltaPrime , a decentralized borrowing protocol backed by Avalanche and GSR Markets, was hit by a $4 million hack stemming from an admin private key leak, fuzzland co-founder Chaofan Shou said in a Sept. 16 post on X.
While the exact circumstances behind the private key breach remain unclear, blockchain investigator ZachXBT noted that DeltaPrime had previously employed North Korean IT workers. However, the analyst emphasized that all flagged personnel had been removed, leaving questions about any connection between the hack and North Korea unresolved.
Blockchain researchers at Cyvers Alerts pointed out in an X post that the hack targeted the protocol’s version rolled out on Arbitrum, adding that the hacker has already swapped the stolen USD Coin (USDC) to Ethereum (ETH).
“It seems that admin has lost the private key. Suspicious address still draining the pools! Affected pools so far are the DPUSDC, DPARB, DPBTCb!”
Cyvers Alerts
In addition to Arbitrum, DeltaPrime also has a protocol launched on the Avalanche network, though no reports have been made on whether that protocol is also vulnerable to attacks. Following the hack, DeltaPrime’s native token PRIME plunged 6% to $1. As of press time, the DeltaPrime team made no public statements on the matter.
First launched on the Avalanche network in January 2023, DeltaPrime attracted over $63 million in total value locked and unlocked more than $20 million in liquidity, the protocol says on its official website. The protocol secured funding from Avalanche, GSR Capital, Moonhill Capital, and Uplift, among others.
Dleta Prime
DeltaPrime, a borrowing protocol backed by Avalanche, recently suffered a significant hack, losing around $4.5 to $6 million. The breach occurred due to a suspected private key leak, which allowed attackers to gain access to the platform’s admin privileges and drain funds from multiple liquidity pools. The affected assets include USD Coin (USDC), Arbitrum (ARB), and Bitcoin (BTCb) on the protocol’s Arbitrum network. Security firm Cyvers was the first to alert the crypto community about the ongoing suspicious transactions.
Though the initial loss was estimated at $4.5 million, further transactions brought the total loss closer to $6 million, according to on-chain researchers. The attacker has reportedly swapped some of the stolen funds into Ethereum (ETH). DeltaPrime’s team has yet to issue a detailed public statement on the matter(
This hack adds to the increasing number of cyberattacks in the DeFi space, which has seen a significant rise in 2024.
What’s the Impact in Future?
The $4.5 million to $6 million hack of DeltaPrime could have significant future repercussions on both the protocol itself and the broader DeFi (Decentralized Finance) ecosystem:
- Loss of User Trust: The breach, stemming from a private key leak, exposes major security flaws. Users might lose trust in DeltaPrime’s ability to safeguard their funds, leading to a potential exodus of liquidity providers and borrowers. Rebuilding confidence could take time and require significant security overhauls.
- Regulatory Scrutiny: With the rising number of DeFi hacks, including this one, regulators might push for stricter oversight on crypto projects. Protocols like DeltaPrime could face regulatory challenges if they fail to adopt stronger security measures.
- Increased Security Costs: DeltaPrime and other DeFi projects will likely need to invest more in security audits, on-chain monitoring, and private key management to prevent future attacks. This could increase operational costs and impact profitability.
- Impact on Token Value: DeltaPrime’s native token (PRIME) already saw a drop following the attack. Continued uncertainty and potential delays in compensation or recovery could further depress token prices
- Wider DeFi Market Impact: The hack underscores the risks inherent in DeFi and could make investors more cautious about participating in protocols that lack rigorous security measures. This might slow down innovation or capital flow into the sector(CoinMarketCap).
In summary, DeltaPrime will need to address security vulnerabilities quickly to restore user trust and ensure future growth. The broader DeFi space might see enhanced regulatory and security frameworks as a result.
