Lien Finance hacked for $542K USDC via smart contract exploit

Lien Finance hacked for $542K USDC via smart contract exploit

A DeFi protocol called Lien Finance was attacked, losing about $542,000 in USDC. The hacker exploited a flaw in the bond token logic to mint unbacked tokens and drain funds.

Details

Lien Finance, a decentralized finance protocol, has suffered a security breach resulting in the loss of approximately $542,000 in USDC. According to monitoring by SlowMist, the attacker exploited a smart contract vulnerability to mint unbacked bond tokens and drain funds. The exploit involved a flaw in the bond token redemption logic, allowing the attacker to mint new abnormal BondTokens without burning the corresponding input bonds. Through a pre-authorized address, the attacker then converted these tokens into USDC, ultimately transferring about 542,144.63 USDC from the victim address. The incident highlights a validation defect in the bond token exchange mechanism, enabling the attacker to bypass asset collateral constraints and create unsupported assets.

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