As a result of an attack by an unknown individual, DeFi-stablecoin project Platypus Finance (USP) lost its peg to the dollar after some $8.5 million in assets were stolen from the Avalanche-based protocol. Following this hack, USP's stable USP coin depreciated by about 52%.
The team discovered that the hacker had taken advantage of an "instant credit" and a loophole in the security check of the pledge agreement. As a result, $8.5 million was lost from the main pool of funds, which was about 35% of the users' investment. The creators of the protocol have enlisted the help of many organisations, such as Binance, Tether and Circle, to stop the theft of money. They also offered to talk to the hacker and offer a reward in exchange for a return of funds.
Platypus Finance provides its clients with an automated market maker programme for pegged assets. DeFi Llama recently reported that the total amount of funds blocked under this protocol is $40.77 million, with a peak of $1.25 billion in March 2022.
Beosin experts estimate that the Web3 industry will lose about $3.6bn during 2022 as a result of hacks, an increase of almost 50% over 2021.