Delta Prime, a decentralized finance (DeFi) platform operating on the Arbitrum network, recently fell victim to a significant cyberattack that resulted in the theft of over $6 million in assets. The hacker behind the attack exploited a vulnerability in the platform’s token minting system, allowing them to drain the liquidity pools and make off with a substantial sum of money.
The breach began when the attacker gained control of Delta Prime’s admin account, likely through the theft of the developer’s private key. With access to the admin wallet, the hacker utilized the platform’s upgrade function to modify several liquidity pool contracts. These contracts were linked to proxy addresses, which are designed to facilitate software upgrades. However, instead of upgrading the software, the attacker redirected the contracts to malicious versions that enabled them to mint an excessive number of tokens.
According to blockchain data provided by Arbiscan, the hacker initially minted over 115 duovigintillion Delta Prime USD (DPUSDC) tokens, an astronomical figure represented as 1.1*10^69 in scientific notation. DPUSDC is a deposit receipt token for the USDC stablecoin, intended to be redeemed at a 1:1 ratio. Despite minting a massive amount of DPUSDC, the hacker only managed to redeem $2.4 million worth of USDC.
The same exploit was applied to other deposit receipt tokens, including Delta Prime Wrapped Bitcoin (DPBTCb), Delta Prime Wrapped Ether (DPWETH), and Delta Prime Arbitrum (DPARB). The attacker minted substantial quantities of these tokens and redeemed a small portion, ultimately absconding with over $6 million in assets, including Bitcoin, Ether, Arbitrum, and USDC.
Cyvers, an on-chain security platform, was one of the first to report the attack, initially estimating the losses at $4.5 million. However, the losses quickly escalated as the hacker continued to drain the pools. Blockchain security specialist Chaofan Shou later confirmed that the total theft had reached approximately $6 million.
This incident highlights the inherent risks associated with upgradable contracts in the DeFi ecosystem. While upgradable contracts provide developers with the flexibility to address bugs post-deployment, they also introduce a centralization risk if an admin account is compromised, as evidenced by the Delta Prime hack. The attack on Delta Prime is part of a concerning trend of high-profile DeFi breaches, with experts warning that larger institutions, such as Bitcoin exchange-traded funds (ETFs), could be potential targets in the future.
In conclusion, the Delta Prime hack serves as a stark reminder of the vulnerabilities present in the DeFi space. As the ecosystem continues to evolve and attract more attention, it is crucial for platforms to prioritize security measures and implement robust protocols to safeguard user funds and prevent malicious actors from exploiting weaknesses. Investors and users alike must remain vigilant and exercise caution when engaging with DeFi platforms to mitigate the risks associated with such attacks.
