- Arcadia Finance, an unsupervised protocol that supports cross-margin accounts on the chain, was recently exploited according to data.
- A cybersecurity firm detected a hack incident on Arcadia Finance in the Ethereum and Optimism networks, resulting in a loss of approximately $455,000.
- The attacker used a process known as frontrunning to steal assets from the protocol. Frontrunning refers to an individual executing transactions ahead of others in a block.
Today, a hack attack resulted in a half-million-dollar loss on the Arcadia Finance protocol; does this attack affect the Optimism network?
Another DeFi Hack Attack: Arcadia Finance
Arcadia Finance, an unsupervised protocol that supports cross-margin accounts on the chain, was recently exploited according to data. Arcadia Finance is a platform that allows users to collateralize their portfolios, utilize capital up to 10 times more, and interact with other protocols using the deposited collateral and borrowed funds.
A cybersecurity firm detected a hack incident on Arcadia Finance in the Ethereum and Optimism networks, resulting in a loss of approximately $455,000. The attacker acted swiftly and transferred around 179.3 ETH from the Optimism network. This amount was obtained through a combination of 148 ETH bridged from the Ethereum network and 59,000 USDC exchanged.
The target of these funds was Tornado Cash, a decentralized privacy solution for cryptocurrencies. By transferring the funds to Tornado Cash, the attacker likely aimed to obscure the transaction history and make it more difficult to trace the origin of the funds.
The attacker used a process known as frontrunning to steal assets from the protocol. Frontrunning refers to an individual executing transactions ahead of others in a block. Frontrunners gain an advantage by prioritizing their transactions to exploit profitable opportunities. This practice enables them to potentially profit from price differentials or manipulate transactions in their favor.
Due to the uncertainty surrounding Arcadia Finance, its total value locked (TVL) has significantly declined in recent days according to data.
What About Optimism?
Arcadia Finance’s hack attack may also have a negative impact on the Optimism network. Data shows that the daily active users on the Optimism network have remained high, with a 3.9% growth in the past week. However, the revenue generated by the protocol has decreased significantly. In the last seven days, revenue generated by Optimism has decreased by 52.6%. This revenue decline could hinder the long-term growth of Optimism.
As for the OP token, it is currently trading at $1,183. The token’s price has seen a significant decrease in the past month, accompanied by a decrease in trading volume. This indicates a reduced frequency of OP token transactions.
