According to blockchain data, Nirvana Finance, a Solana-based yield system, suffered a $3.5 million hack involving the use of flash loans to manipulate and drain its liquidity pools. The price of the protocol’s native ANA token has plunged by more than 80% in the last few hours, while its NIRV stablecoin has lost its peg to the US dollar. Nirvana Finance is now worth only 8 cents.
Nirvana enabled users to earn more than 100% annual yields on locked assets by producing and destroying tokens based on user demand as the protocol bought and sold ANA tokens. Before the hack on Thursday, almost $3.5 million in ANA was locked on the protocol.
Nirvana Hack: Things You Should Know
Nirvana Finance, a Solana-based DeFi protocol startup, ran into liquidity issues on July 28 due to a flash loan attempt. The attack caused the protocol’s native token, ANA, to lose 90% of its value rapidly. The attack still has devastating consequences. And Nirvana’s stablecoin, NIRV, has lost its dollar peg and is now trading at $0.137467.
Flash loans are popular among cryptocurrency users but are unfortunately associated with malicious activity. Decentralized Finance (DeFi) can only provide this feature as the users can use it to provide liquidity. Moreover, it can also help to take advantage of arbitrage opportunities by borrowing large amounts of cryptocurrency for a short period, such as a few seconds.
According to information from the Nirvana hacker’s account, the attacker stole $10 million of worth USDC from the main pool vault. Hacker used flash loans provided by Solend Protocol, a lending network based on the Solana blockchain. They then went on to mint $10 million worth of ANA using the money from the quick loan.
Hackers Withdraw $3.5 Million USDT
The hacker boosted ANA price from $8 to $24 and converted it into USDC and USDT at this higher cost. It authorizes them to withdraw $3.5 million USDT from Nirvana’s accounts. When they tricked Nirvana’s treasury into believing the 10 million USDC inflows were genuine, they released all of the liquidity in the treasury. They then transferred 10.25 million USDC to Solend due to the hack.
Later, hackers transferred the stolen funds to the Ethereum network using Wormhole. It’s a blockchain bridge that allows payments between Solana and other networks. One of DeFi’s largest hacks occurred earlier this year when the Wormhole Bridge was attacked and lost $325 million.
The Backlash of Nirvana Hack
Following the attack, Nirvana’s trading features were disabled. The price of ANA fell from $8.90 to $1.03, losing 90% of its value. Nirvana’s stablecoin, NIRV, also suffered a setback and lost its peg. Following their acknowledgment of the attack, the Solend protocol team stated they were in contact with Nirvana to see what they could do to assist.
Nirvana’s Twitter account announced the hack. Moreover, they stated they were investigating the incident and would notify the audience as soon as possible. Better projects such as DeFi Coin (DEFC) have never been hacked. Perhaps, you can refer to DeFi Coin price prediction if you want to buy DEFC in future.