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Euler Finance $200 million stolen, causing chain losses in the Decentralized Finance ecosystem.
The DeFi ecosystem suffers a heavy blow: The Euler Finance security incident affects multiple projects
Recently, the DeFi lending platform Euler Finance suffered a hacker attack, resulting in a loss of approximately $200 million in funds. As an innovative underlying lending protocol, the security of Euler Finance has attracted significant attention. Due to the composability of DeFi, this attack also affected several other DeFi projects, causing tens of millions of dollars in cascading losses.
Affected Projects and Losses
Angle Protocol: Estimated loss of $17.61 million. As a decentralized stablecoin project, Angle has deposited part of its funds in Euler to earn yields. Despite having a surplus of $5.58 million, it still cannot fully cover the losses.
Balancer: A loss of approximately $11.9 million. The main losses were from the Balancer Boosted Euler USD pool (bbeUSD) and related trading pairs.
Idle Finance: Total losses of approximately $10.99 million, including losses of $5.3271 million from Best Yield Vault and $5.6628 million from Yield Tranches.
Yield Protocol: Expected losses not to exceed $1.5 million. A portion of its liquidity pool funds is stored on Euler.
Yearn: yvUSDT and yvUSDC have a total risk exposure of $1.38 million. Losses will be borne by the Yearn Treasury.
Harvest: The USDC, USDT, and WETH Vaults have been affected, and the specific loss amount has not yet been announced.
Inverse Finance: DOLA Fed lost $860,000 in funds.
SwissBorg: a loss of 1617.23 ETH and approximately 1.69 million USDT, accounting for 2.27% and 29.52% of the subscribed funds, respectively.
Opyn: The Zen Bull strategy has been impacted, and the specific loss amount has not been disclosed.
Sherlock: As Euler's insurance provider, has paid out 3.3 million dollars and approved a 4.5 million dollar payout proposal.
Sense Finance: Affected indirectly due to trading Idle and other fixed income assets.
Impact and Reflection of Events
This incident highlights the chain risks in the Decentralized Finance ecosystem. While composability is one of the advantages of DeFi, it can also become a potential risk amplifier. When a core protocol encounters issues, it may trigger a series of chain reactions that affect the entire ecosystem.
For DeFi users and project parties, this incident once again emphasizes the importance of diversifying risks. One should not overly rely on a single protocol or strategy, but should adopt diversified asset allocation and risk management measures.
At the same time, this highlights the importance of security audits and insurance mechanisms for DeFi projects. Although Euler Finance had been audited and purchased insurance, it still failed to completely prevent this attack, reminding us of the need to continuously improve and upgrade the security measures of DeFi.
As the DeFi industry continues to evolve, achieving a balance between innovation and security will be an ongoing challenge. Project teams, auditing firms, insurance providers, and users all need to work together to build a safer and more robust DeFi ecosystem.