The world of cryptocurrencies regularly suffers cyberattacks. Recently Linear Finance was targeted by one of these offensives. Decentralized protocol Linear Finance reports in a blog post that it was the victim of an attack that resulted in the complete removal of all USD liquidity on PancakeSwap and Ascendex. This caused the USD price to plummet to zero.

Unlimited creation of AAVE tokens by attackers

The hackers behind this attack were able to create unlimited numbers of AAVE tokens. These new coins enabled them to exchange AAVEs for USD in large quantities on the Linear Exchange platform. Transactions continued with the sale of these USD on PancakeSwap and Ascendex, wiping out liquidity on these markets.

Measures taken by Linear Finance to counter the attack

Linear Finance was quick to react to the attack. Several measures were immediately put in place to limit the damage caused by the attackers:

• Suspension of contracts authorizing the creation, destruction or exchange of tokens: This temporarily prevents pirates from creating more tokens or continuing their fraudulent exchanges.
• Linear USD gateway contract deactivation: By blocking this function, Linear Finance minimizes possible interactions with the USD token. It allows the team to take the necessary steps to contain the situation.
• Identifying attackers’ portfolios and sharing information with the authorities: Those responsible for the attack will not have an easy time of it. Linear Finance is working closely with the main exchange platforms and the relevant authorities. They are attempting to locate the cybercriminals and recover the stolen funds.

In parallel with these actions, Linear Finance works in collaboration with various security specialists and auditors. They study the incident in minute detail. The aim is to clearly identify the flaws and vulnerabilities that enabled such an infiltration.

Short-term consequences and future repercussions

The Linear Finance protocol will inevitably suffer more or less significant consequences following this offensive. Here are some points that could be impacted:

• Investor confidence: Incidents of this kind can cause uncertainty among those who bet on the project. It will certainly take some time for Linear Finance to regain the level of confidence achieved before this attack.
• Reactivity of exchanges on the platform: Constraints linked to immediate measures taken by Linear Finance may slow down transactions and limit access to the protocol for an indefinite period.
• Future project development: This situation represents an additional challenge for the entire Linear Finance team. It requires them to work closely with security specialists. This is to resolve the problems identified and ensure a smooth future for the protocol.

Conclusion

This attack on Linear Finance is yet another illustration of the risks associated with the world of cryptocurrencies. Decentralized projects offer advantages, but still remain exposed to threats from cybercriminals. To minimize these risks, it is crucial that market players continue to improve their security practices. It is important to protect the data and applications deployed on this type of network. While each platform can progress independently, communities must also work together to help each other in the fight against cyberattacks.