Cross-chain lending protocol Radiant Capital (RDNT) lost 1,900 ETH to a decentralized finance () exploit that attacked a new lending market for the USDC stablecoin. The attacker targeted the Ethereum layer-two solution Arbitrum protocol on January 2, 2024.
The Radiant team received reports of an issue regarding a new USDC market on Arbitrum late on January 2, 2023. Its Council temporarily suspended the protocol’s lending and borrowing markets while they investigated the situation.
DeFi Exploit Beats Known Radiant Capital Issue
Blockchain security firm Peckshield said the attacker exploited a new USDC market six seconds after activation. The entity seems to have exploited an issue that affects lending markets forked from decentralized finance protocols Compound and targeted a known rounding issue in the smart contracts used in the Aave and Compound code.
liquidity relies on smart contracts, whereas traditional finance liquidity usually relies on an institutional intermediary. DeFi users can create a new market and deposit their liquidity into a smart contract. Liquidity providers earn fees for trades on the markets for which they provide liquidity.
Anchain.AI and Cyvers offer tools to understand criminal behavior on-chain and means to assess smart contract code for vulnerabilities. The DeFi space also became the target of regulators who think that certain stakeholders must be held responsible if sanctioned entities use a protocol.
“There’s still a core group of folks that are not only writing the software, like the open source software, but they often have governance and fees,” said the chairman of the US Securities and Exchange Commission, Gary Gensler.
The crypto industry hopes that Bitcoin, which does not have a decentralized marketplace of comparable size to Ethereum, will receive additional liquidity through exchange-traded products starting in January. The market expects an SEC decision on a Bitcoin exchange-traded fund from ARK Invest on January 10, 2023.
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