July 12, 2022 (Investorideas.com Newswire) BanklessTimes has been studying the trends in the adoption of flash loans. It concludes that Q2 2022 registered the largest flash loan heist to date. The site has presented data indicating that 27 flash loan attacks resulted in a loss of over $308M worth of crypto lover’s funds. That was a 2000% surge from the nearly $14.2M lost in Q1.
“The growing number of web3 projects available today comes with significant monetary investments,” says BanklessTimes’ CEO Jonathan Merry. He adds, “It isn’t surprising, therefore, that those flash loan assaults are rising. These have escalated owing to the complexities of building smart contracts, making them more vulnerable to these exploits.”
Q2 Registered Record-Breaking Flash Loan Heists
In Q2 alone, two major flash loan attacks accounted for a significant portion of the total losses. The first was the $182 Million attack against Beanstalk Farms, the largest such attack on record.
The second was the $79 Million attack against Fei Protocol. These two attacks alone accounted for 59% of the quarter’s total loss. But even with their exclusion, Q2 losses would still dwarf those from Q1 attacks.
For comparison, the biggest attack in Q1 was the $3 Million exploit against Deus Finance. These large-scale attacks have called into question the security of flash loans and their place in the Web3 ecosystem.
Flash Loan Attacks Spell Doom for Web3 Projects
BanklessTimes projects that losses from these attacks will touch the $656M mark by the end of 2022. That’s a 78% increase over last 2021’s losses, thanks to how flash loans work.
In the past, these attacks have been carried out with little to no profit. However, they are increasing in frequency because they’re easy to execute with little risk.
These attacks often result in big losses, but it’s important to remember that there are many small-scale attacks too. The difference is that the latter are lost in the noise of simple arbitrage farming by bots.
Again flash loan attacks are rarely limited to one exploit. On the contrary, they often involve multiple exploits, including manipulating liquidity pools, bridge vulnerabilities, and price oracles. Full story and statistics can be found here: Amount lost through Flash loans attacks soared 2000% in Q2 2022
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