EUL token down 52% after the $200 million Euler protocol exploit

• Hackers stole almost $200 million from Euler protocol on Monday.
• USDC accounted for a majority of the stolen tokens.
• Euler Labs is currently working to recover the funds.

Euler protocol is facing a different threat from the crypto firm collapses, crypto lawsuits, and crypto-related bank shutdowns that have plagued the crypto space in the recent past.

The small-cap Ethereum-based decentralized finance lending protocol was on Monday hacked leading to the loss of crypto assets worth nearly $200 million.

Euler flash loan attack

Blockchain security firm PeckShield on Monday tweeted notifying Euler to take a look at some fishy transactions from its platform.

Hi @eulerfinance: you may want to take a look: https://t.co/L7ddZhHNq5

— PeckShield Inc. (@peckshield) March 13, 2023

Looking at the transactions from Euler on etherscan, the hacker(s) took off with a variety of cryptocurrencies including 34.4 million USDC, 8.89 million DAI, 85,690 stETH, and 849 WBTC.

According to a tweet from SlowMist, another blockchain security firm:

“The attacker used flashloans to deposit funds and then leveraged them twice to trigger the liquidation logic, donating the funds to the reserve address and conducting a self-liquidation to collect any remaining assets.”

Euler Labs, the startup behind Euler Protocol, has however said that it successfully stopped the exploit and it is currently working to recover the stolen funds in collaboration with a number of firms including Chainalysis.

An update on our work today to recover funds for Euler protocol users.

Here are a few actions we took immediately:

1. Stopped the direct attack as soon as possible by helping disable the EToken module, which blocked deposits and the vulnerable donation function

2. Engaged TRM… https://t.co/6ZClE9uGoH

— Euler Labs (@eulerfinance) March 14, 2023

Euler’s native token, EUL, down 52%

The native token of Euler, EUL, dived by more than 52% following the revelation of the exploit.

At press time, the token was trading at $3.08 down from a high of $6.4826 on Monday morning. And although the token price seems to have consolidated above $3, it is not certain if the token will be able to hold that level seeing that it had dipped from its attempt to recover after the fall.