Cheese Bank's multi-million dollar hack explained by security firm

Cheese Bank's multi-million dollar hack explained by security firm

An Ethereum-based decentralized finance, or DeFi, platform known as Cheese Bank recently suffered a $3.3 million loss — the product of an early-November hack. The thieves utilized a somewhat newly-found weakness in the DeFi sector which harnesses flashloans. The Cheese Bank thieves stole the cheddar via U.S. dollar-pegged stablecoins USD Coin (USDC), Tether (USDT) and Dai (DAI). A number of other platforms have also suffered similar fates in recent days.

“In the string of attacks, we have seen malicious actors use flash loans to instantaneously borrow, swap, deposit and again borrow large numbers of tokens so they can artificially manipulate the price of a specific token on a single exchange (e.g., Uniswap, Curve),” blockchain security firm PeckShield said in a blog post on Monday after citing Value DeFi and Akropolis as two other recent similar DeFi hacks. 

“This sequence is essentially the foot in the door, allowing the attacker to then exploit that exchange’s anomalous pricing.”

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Value DeFi suffered

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