$220,000 flash loan attack hits Polygon’s QuickSwap

In a flash loan exploit, hackers made $220,000 upon attacking DEX or decentralized exchange. DEX shared that it had closed its lending protocol, QuickSwap Lend, after the exploit happened. It further said that the XYZ lending market is its only platform that was hit by the exploit.

As per DEX, loss of funds has not been faced by any user. A reputed name in DeFi space, Flash loans enable crypto users to seek immediate loans without any collateral.

Also Read: Solana DeFi trading hack costs its platform Mango Markets $100 million

Though nothing negative has affected users this time, they are susceptible to exploits such as QuickSwap’s. Flash loan exploits are not unusual and are a situation when the price of an asset is manipulated by an extremely capitalized bad actor. They do so by taking out ample loans followed by quickly selling back this borrowed capital to make immense profits. 

Peckshield, the blockchain security company shared information regarding the exploit. According to Etherscan data, after a few hours, hackers deployed sanctioned coin mixer Tornado Cash with the intention of hiding the funds’ origin. 

QuickSwap is utilized by individuals to swap tokens. Being a DEX, it doesn’t need sign-up and doesn’t involve a middle-man, which makes everyone use it.

QuickSwap, Uniswap DEXs fork, is among the biggest DeFi apps. However, it runs on Polygon, the blockchain which hosts MATIC, the 12th biggest cryptocurrency. 

As already said, DEXs have possibilities of flash loans as well as other hacks, but users have entire control of funds. Also, there’s no insurance.