Arcadia Finance Exploited Due to SwapData Vulnerability

Arcadia Finance, a DeFi protocol on Base blockchain, was exploited for $3.5 million due to a SwapData vulnerability, Cyvers security firm reports.

The exploit highlights vulnerabilities in smart contracts, urging greater security measures and continuous audits across DeFi sectors to prevent similar incidents.

Arcadia Finance Loses $3.5 Million to Vulnerability

Arcadia Finance faced a major breach when a SwapData vulnerability was exploited, leading to the theft of approximately $3.5 million. The incident was first reported by Cyvers, a blockchain security firm.

Entities involved include Arcadia Finance and Hacken, which confirmed the vulnerability linked to the Rebalancer contract. This exploit occurred on the Base blockchain, backed by Coinbase.

Funds Converted to ETH Amid Security Concerns

The breach affected several tokens including USDC, USDS, and WETH, causing concern over DeFi security. Funds were quickly converted to ETH and shifted to the main Ethereum network.

Though base blockchain recently introduced a bug bounty, institutional reimbursements or funding responses tied directly to this breach remain unreported by official channels.

Repeated Risks in DeFi Space Highlighted by Experts

Similar smart contract exploits have been prevalent in the DeFi space, with unchecked parameter manipulation repeatedly posing risks. Historically, such breaches have led to substantial financial losses worldwide.

Security advisories from Cyvers and Hacken emphasize the critical need for proper validation in smart contracts to mitigate future vulnerabilities and safeguard digital assets.

The attacker manipulated swapData parameters to perform unauthorized swaps, draining user vaults through the Rebalancer contract’s validation flaw. – Hacken Security Analyst, Hacken