Avalanche-based stableswap platform Platypus DeFi revealed that they were hacked, resulting in losses totaling 8.5 million from the main pool. The attacker reportedly took advantage of a flaw in the protocol's USP solvency check mechanism using a flash loan to exploit a logic error in the contract holding the collateral.

The hack has impacted deposits from users up to 35% of their deposits. However, funds in other pools are unaffected.

Platypus DeFi has contacted the hacker to negotiate a bounty in exchange for the return of the funds, and they are also working with Binance, Tether, and Circle to freeze the funds of the hacker and prevent further losses.

BUSD and USDT have already been frozen. The team is exploring options for compensation and reimbursement for affected investors.

The announcement also emphasizes that the team is taking the matter seriously and working diligently to resolve the situation. The team appreciates the community's patience and understanding during this difficult time and assures them of further updates on the situation.

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Dear Community,

We regret to inform you that our protocol was hacked recently, and the attacker took advantage of a flaw in our USP solvency check mechanism. They used a flashloan to exploit a logic error in the USP solvency check mechanism in the contract holding the collateral.

2/ Exploiter contract: https://snowtrace.io/address/0x67afdd6489d40a01dae65f709367e1b1d18a5322/…

Exploit: https://snowtrace.io/tx/0x1266a937c2ccd970e5d7929021eed3ec593a95c68a99b4920c2efa226679b430…

Exploiter: https://snowtrace.io/address/0xeff003d64046a6f521ba31f39405cb720e953958

3/ There were losses totaling 8.5M from the main pool. Right now deposits from users are covered up to 35% of their deposits. Funds in other pool are unaffected.

The hacker has been contacted to negotiate a bounty in exchange for return of the funds.

4/ We understand that this news may be alarming and unsettling, and we want to assure you that we are treating this matter with the utmost seriousness. We are currently working with several parties,

5/ including Binance, Tether, and Circle, to freeze the funds of the hacker and prevent further losses. Right now, the BUSD and USDT have been frozen.

We are also exploring options for compensation and reimbursement for affected investors.

6/ We understand that this is a difficult time for our community, and we appreciate your patience and understanding. We want to assure you that we are taking this matter seriously and will keep you informed as we make progress.

Thank you for your continued support.