Deus Finance’s Stablecoin DEI Was Hacked, Token Price Drop More Than 30%

The DEI token has already been hacked and has already lost its $1 peg. The token was recently pegged at $0.3 and lost that peg during the assault. The cause of the attack was discovered to be a fundamental technical issue in the token contract. The stablecoin is currently trading at $0.2 at the time of writing.

The project is also now calling for the community’s help to overcome the consequences. Currently, the DUES token has dropped more than 33% after the above news.

For all white hackers that were able to rescue funds during the DEI exploit from today 05/05/2023
We are confirming 0x7f5ae1dc8d2b5d599409c57978d21cf596d37996
As a DEUS team owned multisig on Arbitrum.
Please get in touch with us if you have not already. https://t.co/7w5y6Nh2EM

— DEUS (@DeusDao) May 5, 2023

A fundamental implementation mistake in the token contract is a problem in the token contract’s code that impacts the contract’s functioning or security.

For example, a fundamental implementation error in the DEI stablecoin’s token contract allows anybody to issue additional DEI tokens with no constraints or controls. This enabled a hacker to take advantage of the token contract and influence the price of the DEI.

Every financial instrument and protocol designed on the Deus Finance infrastructure use DEI as collateral.

Deus Finance is a project that intends to make enterprise-grade blockchain derivatives available to the general public. It serves as the foundation for hopeful on-chain digital derivatives such as synthetic stocks, commodities, FX, and cryptocurrency.

Hackers compromised Deus Finance on April 28. According to PeckShield, the incident resulted in a loss of up to $13.4 million, with the majority of stolen assets being Ethereum (ETH).

The hack is made feasible by the use of a flash loan to manipulate the price oracle, which reads from the StableVW AMM – USDC/DEI pair. It was triggered using 800 ETH, which was withdrawn from Tornado Cash and transmitted to Fantom through MultiChain. The stolen monies were converted to ETH and put in the hacker’s account at the conclusion of the assault.

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