The decentralized finance (DeFi) protocol Penpie, which operates on the Pendle tokenized yield platform, suffered a significant exploit on Wednesday, resulting in the loss of approximately $27 million in crypto assets. This incident further underscores the ongoing vulnerabilities in the DeFi sector.
Blockchain data reveals that the exploiter drained a variety of assets, including staked ether (ETH), Ethena’s sUSDE, and wrapped USDC stablecoin, from Penpie. Following the attack, the stolen assets were quickly converted to ETH, primarily using the Li.Fi platform, and then transferred to a new address, according to data from Etherscan.
Interestingly, the exploiter’s address was initially funded with 10 ETH, worth around $25,000, via the crypto mixer Tornado Cash just hours before the exploit took place, suggesting a well-planned operation.
In response to the attack, Pendle, the platform on which Penpie is built, confirmed that they had identified a security breach and are in close communication with the Penpie team. While Pendle assured investors that their funds remain safe on their platform, they took the precautionary step of temporarily pausing all contracts to prevent further damage.
The impact of the exploit was immediately felt in the market, with Penpie’s native token (PNP) plunging by 40% over the course of the day, as reported by CoinGecko. Pendle’s own token (PENDLE) also experienced a decline, dropping nearly 8% in the past 24 hours, underperforming major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), which saw a 1%-3% decline.
This incident is a stark reminder of the risks associated with DeFi protocols, which have been frequent targets of hacks and exploits. In 2023 alone, users of digital assets lost around $2 billion due to various scams, hacks, and exploits, according to a report by De.fi.
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