USM Protocol Exploit Results in $136,000 Loss
The USM protocol experienced an exploit due to a flaw in its pricing logic. An attacker manipulated internal pricing using a flash loan, resulting in a loss of approximately 70.83 ETH.
The USM protocol suffered an exploit caused by a pricing logic flaw in the ethFromDefund() function within defund(). This flaw involved the use of the arithmetic mean of current and estimated final FUM sell prices for a single redemption, which lacked split invariance. The attacker exploited this vulnerability by utilizing a flash loan to call fund() and manipulate the internal pricing mechanism.
By splitting the same FUM amount into 64 smaller defund() calls instead of making a single large call, the attacker was able to extract more ETH than would have been possible otherwise. This method of exploiting the pricing logic led to a total loss of approximately 70.83 ETH, which is valued at around $136,000.
The incident occurred on the Ethereum chain, which allows for the tracing of transactions related to the exploit. However, specific addresses involved in the incident are not provided in the description. The on-chain record would reflect the transactions executed during the exploit, but further details on the addresses are not available.