Linear Finance Faces Liquidity Drain in LUSD Token Attack
A recent attack on decentralized finance (DeFi) protocol Linear Finance has resulted in a significant liquidity drain in its Linear USD (LUSD) token. However, the protocol team swiftly responded to the incident and has taken necessary measures to address the issue.
Attack Leads to LUSD Price Collapse
On September 21, Linear Finance announced that it had experienced a security breach, leading to the complete depletion of LUSD liquidity on decentralized exchanges PancakeSwap and Ascendex.
As a result of the attack, the price of LUSD collapsed to zero. The attacker exploited the system by minting an unlimited supply of LAAVE tokens, which were then traded for LUSD on the Linear Exchange. The acquired LUSD was subsequently dumped on PancakeSwap and Ascendex, causing the stablecoin’s value to plummet.
Despite the attack, Linear Finance’s total value locked remains around $8 million, indicating that the protocol’s overall stability has not been severely affected. However, the team is actively working to address the issue and prevent further exploits.
Linear Finance Team Responds
In response to the attack, the Linear Finance team has issued an apology and implemented immediate measures to safeguard the protocol and its user community. These measures include pausing all token minting, burning, and exchanging contracts to prevent further exploits.
The team has also disabled the Linear bridge contract for LUSD, effectively cutting off the attacker’s potential future access. In addition, they have enlisted the expertise of a leading security team to track down and bring the attacker(s) to justice. Information about the wallets involved in the exploit has been shared with major exchanges and relevant authorities.
About Linear Finance
Linear Finance is a DeFi protocol known for providing cross-chain liquidity and synthetic asset trading. The protocol operates a collateralized debt pool that allows users to deposit collateral and mint LUSD. This stablecoin, pegged to the US dollar, is then utilized for trading synthetic assets on the platform.
The protocol’s governance relies on the LINA token, which is used for voting and staking rewards. Linear Finance offers two primary tokens: LINA, which serves governance and staking purposes, and LUSD, the stablecoin used for synthetic asset trading.
Overall, the Linear Finance team is actively addressing the recent attack and taking steps to ensure the protocol’s security and stability moving forward.
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