The native token of one of the leading decentralized exchanges in the cryptocurrency industry experienced a sharp decline following the announcement that it had been “exploited” due to a vulnerability in a programming language.
Curve Finance, like other decentralized finance projects in the crypto market, relies on various software applications built on blockchain technology. A glitch in a specific version of Vyper, a widely used programming language in DeFi applications, resulted in the exploit, as tweeted by Curve on Sunday.
Since the emergence of this issue, Curve Finance’s CRV token has dropped approximately 13%, currently trading at around 64 US cents as of 12:50pm in Singapore on Monday, according to Bloomberg data.
Security audit provider BlockSec estimated that the exploit has already caused losses exceeding $40 million. Tarun Chitra, the CEO and founder of crypto risk modeling firm Gauntlet, calculated that the exploiter made away with about $20 million worth of CRV and a version of Ether.
Curve stated, “We are assessing the situation and will provide updates to the community as we develop our response.”
Data provider DeFiLlama reported that the total value of assets locked on Curve Finance, the second-largest decentralized exchange after Uniswap, has decreased to approximately $1.7 billion on Monday from over $3 billion on Sunday.
The founder of Curve, Michael Egorov, has not responded immediately to requests for comment.
The CRV token is used as collateral in the decentralized lending service called Aave. Chitra from Gauntlet mentioned that there have been no indications of “bad loans” on the Aave platform resulting from the decline in CRV. CoinGecko figures show that Aave’s token has declined by around 4% in the past 24 hours.
Digital assets such as Bitcoin and Ether experienced slight fluctuations due to concerns about potential broader effects, but they later stabilized. Bitcoin remained largely unchanged at around $29,400, while Ether stayed steady at $1,865.
In 2022, hackers stole a record-breaking $3.8 billion in crypto, and Curve Finance was one of the many organizations affected.
The frequency of such incidents may have slowed down, but the risk of security breaches continues to cast a shadow over decentralized finance (DeFi), where individuals rely on blockchain-based software known as smart contracts for trading and lending activities.
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