Flash Loans and Crypto Exploits

A "hacker" made off with $3.4 million dollars this week in an event that took just seconds. It is nearly impossible to identify the perpetrator.

The attack targeted a crypto liquidity management protocol called Gamma.

The incident has been reported widely in the media, and there have been many efforts made to explain the attack:

🚨ALERT🚨Our AI powered system has detected multiple suspicious transactions involving @GammaStrategies

Total loss is more than $4M so far! Attacker has created many malicious contracts and executed the transactions!
Attacker's address: https://t.co/Yx4wfnDixc
Example… pic.twitter.com/jByVKI5Ytx

— 🚨 Cyvers Alerts 🚨 (@CyversAlerts) January 4, 2024

The perpetrator employed a flash loan, which is a way of borrowing large amounts of money for tiny amounts of time.

Here's a good description of flash loans and how they work.

Gamma explains the attack here.

Here's the hacker address.

I didn't realize you can write a private note to a wallet address.