Yearn loses $3M to flash loan attack days after inflating supply 20%

DeFi platform Yearn Finance is down $2.8 million after a flash loan attack rocked one of its cryptocurrency lending pools.

While Yearn devs say the exploit drained $11 million from the platform’s so-called vaults, but so far it seems the attackers got away with just one quarter of the crypto initially removed.

This is a good primer on the ‘flash loans’ that plague DeFi platforms like Yield.

Amazingly, the raid hasn’t really affected the price of YFI, Yearn’s native token.

Sale volumes briefly spiked, sending YFI down around 10% after word of the attack broke, but it has since rebounded and now trades a few percentage points up for the day.

And the volume spike (mostly SELL) pic.twitter.com/qAldz6BTll
— UniWhales DAO (@uniwhalesio) February 4, 2021

Sell volumes spiked 12% after the attack.

Earlier this week, Yearn stakers voted to mint 6,000 new YFI tokens — worth over $200 million — which inflated its supply by 20%.