Penpie, a DeFi protocol built on Pendle’s yield platform, was exploited for $27 million, causing a dramatic 40% drop in its PNP token value.
In a significant blow to the decentralized finance (DeFi) space, the Penpie protocol, which operates atop Pendle’s tokenized yield platform, was exploited for approximately $27 million worth of crypto assets on Wednesday. The attack has sparked considerable concern within the crypto community as it highlights ongoing vulnerabilities in DeFi platforms.
The breach involved the draining of various assets, including staked ether (ETH), Ethena’s sUSDE, and wrapped USDC stablecoin. According to blockchain data from Etherscan, the stolen funds were converted predominantly into ETH using the Li.fi platform before being transferred to a new address. Interestingly, the exploiter’s address, which initially held 10 ETH (valued around $25,000), was funded via the crypto mixer Tornado Cash just hours before the exploit occurred.
Pendle, the underlying platform for Penpie, swiftly acknowledged the security breach and has been in close contact with Penpie’s team to address the issue. In a precautionary move, Pendle paused all contracts to ensure the safety of funds within its own ecosystem, reassuring investors that their assets remain secure.
The aftermath of the exploit saw a severe impact on Penpie’s native token, PNP, which plummeted by 40% in a single day. CoinGecko data shows that PNP’s drastic drop is a stark contrast to the relatively modest declines seen in major cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), which experienced declines of 1% to 3%. Pendle’s own token (PENDLE) was not spared, falling nearly 8% in the last 24 hours.
This incident underscores the ongoing risks associated with DeFi protocols, which have become frequent targets for hacks and exploits. According to a report from Defi, digital asset users faced losses totaling around $2 billion due to scams and security breaches throughout 2023 alone.
As the crypto community reels from this latest exploit, the focus will likely turn to enhancing security measures across DeFi platforms to prevent future attacks and protect user assets.
