Prisma Finance cyber attack results in $12 million loss

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Prisma Finance Cyber Attack Overview

Prisma Finance, a decentralized finance (DeFi) protocol that leverages Ethereum liquid staking and re-staking tokens (LRTs) to release stablecoins, recently fell victim to a cyber attack resulting in a loss of $12 million.

Hackers Exploit Vulnerability

The breach was initially detected by Cyvers, a company specializing in blockchain security, who identified that the hackers successfully emptied 3,258 ETH from the protocol. In response to this security incident, Prisma Finance swiftly took action by halting the protocol and advising users to revoke any permissions associated with the impacted smart contracts.

Asset Disbursement and Market Impact

An analysis conducted by Peckshield, a cybersecurity firm, revealed that the stolen assets were dispersed to three Ethereum addresses. Following the attack, the value of PRISMA token, native to the protocol, experienced a 30% decline. However, over time, the token’s market capitalization recovered to $9 million, with a total of $110 million being drained from the protocol, leaving $127 million in Total Value Locked (TVL).

Stablecoin Offerings by Prisma

Prisma Finance issues two-dollar pegged stablecoins, known as mkUSD and ULTRA, which can be minted against Ethereum liquid staking tokens (LSTs) and re-staking tokens (LRTs). The leading stablecoin, mkUSD, boasts a market capitalization of $35 million, while the newly introduced ULTRA has surpassed $2 million in value. The protocol’s design draws inspiration from LUSD, Liquidity, which has implemented protective measures to mitigate potential attacks.

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Chris Jones

Hey there! 👋 I'm Chris, 34 yo from Toronto (CA), I'm a journalist with a PhD in journalism and mass communication. For 5 years, I worked for some local publications as an envoy and reporter. Today, I work as 'content publisher' for InformOverload. 📰🌐 Passionate about global news, I cover a wide range of topics including technology, business, healthcare, sports, finance, and more. If you want to know more or interact with me, visit my social channels, or send me a message.
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