Warp Finance had huge flash loans exploit in which it lost more than $8 Million.
The Decentralized Finance lending protocol has said that it will use Chainlink oracles in its system now to protect against such hacks and provide a more secure ecosystem.
Warp. Finance Protocol to Implement Chainlink Oracles
The firm is relaunching the protocol with the integration of Chainlink oracles to curtail any hacks and exploits. The Warp Finance flash loans exploit happened since the existing oracles could not correctly calculate the value of the pool tokens. During the last exploit, a feature allowing ‘limitless funds borrowing when returned from the same Ethereum block’ was abused.
The exploitable price oracle made the protocol susceptible to hack and led to an $8 Million attack. Chainlink oracles are intended to get the price of the token from multiple channels using the Chainlink feeds from every critical function. Since Warp Finance uses liquidity provider tokens for collateral to get loans, it is essential that the value of tokens is calculated correctly.
The firm announced that the exploit happened since the price oracle used by the system earlier was insecure. However, now the team is relying on the highly secure and robust oracle solution. Warp Finance noted, “Our research and due diligence concluded that Chainlink was the most secure, reliable, and proven oracle solution, and will protect the Warp Finance ecosystem from similar flash loan-funded price oracle attacks moving forward.”
Chainlink assures that the price oracles cover most of the market since the flash loans exploits can largely impact markets. Warp Finance protocol was attacked in December 2020 when the firm said that bad actors exploited the protocol to get loans much higher than the collateral value and get around $8 Million worth of stablecoin. The firm was able to recover most of the user funds. The firm had said that it is considering all the necessary and possible steps to ensure a safe relaunch. Warp finance protocol would now use Chainlink price feeds to relaunch the protocol with a safer, more efficient, and more secure version.
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