Cream Finance Loses $25 Million To A Flash Loan Attack

PeckShield reported through a tweet of the new hack on Cream Finance. The blockchain security company said a flash loan attack on the decentralized finance lending and borrowing protocol.

PeckShield explained that the hacking came through a 500 Ethereum flash loan from the attacker. This was used to infiltrate a reentrancy bug in the smart contract of the Flex Network. Usually, flash loans being undercollateralized can be borrowed and repaid within a single transaction.

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As a DeFi protocol for lending, Cream Finance allows users to earn interest from their deposited assets. Though Cream Finance is a fork of the Compound protocol, its operation is quite different from Compound or Aave. The platform has several more markets for some esoteric digital assets.

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This attack on Cream Finance was exploitation involving 1,308 Ethereum and over 418 million AMP, the native token of Flexa Network. According to PechShield, the Ethereum records reveal that over $6 million were hacked at 5:44 UTC.

Cream Finance Becomes Another DeFi Protocol Hacked In 2021

Furthermore, the Cream Finance team members confirmed the authenticity of the hacking reporting. Then, reporting on Discord Channel, the project’s official channel, the members started working with PeckShield.

The team revealed that the hacking was on the CREAM v1 market on the Ethereum Blockchain. Furthermore, they mentioned that it’s through the reentrancy of the contract on the AMP token.

At the time of writing, AMP’s value has dipped by 15% within few hours to $0.05. Also, the value of Cream Finance’s native token, CREAM, plummeted by about 6%.

However, ETH is at $3, 190.46 showing a slight dipping within the last 24 hours. The total amount of the Crean Finance hacking is more than $25 million. The address of the hackers shows that they presently have about $18.8 million.

 Cream Finance Loses $25 Million To A Flash Loan Attack

 Cream Finance Loses $25 Million To A Flash Loan Attack

Amidst the hack, Cream Finance is down by 6% | Source: CREAMUSD on

The Cream Finance team has put a stop to any further loss. The team said that it now has a pause on AMP’s supply and borrow. It further acknowledged that the hack doesn’t affect any other market. Eason Wu, the protocol’s production Manger, disclosed this information on Discord.

Recall that earlier in the year; Cream Finance had a huge hack. The attack led to the loss of $37.5 million worth of digital assets. According to the report, the earlier hacking had a root cause from the exploitation of Alpha Finance.

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Flash loans have remained one of the controversial features of decentralized finance. This’s because there’s no collateral needed for the loans, and hence, they are susceptible to hacks. This accounts for the recent attacks and hacks of flash loans.

A similar incident is a hack on the Bilaxy crypto exchange on August 28. The exchange had a huge hot wallet hack that compromised about 295 ERC-20 tokens. Also, a hack on Liquid on August 19 resulted in a loss of about $100 million.

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$7 Million Lost in Flash Loan Attack on BSC’s BurgerSwap

Key Takeaways

  • BurgerSwap was hit by a flash loan attack last night. The losses amount to roughly $7.2 million.
  • Uniswap founder Hayden Adams noted that a key part of the code was changed by the BurgerSwap team, raising suspicions of an inside job.
  • Incidents on Binance Smart Chain have multiplied in recent weeks resulting in tens of millions in lost user funds.

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Another Binance Smart Chain app has suffered a flash loan attack. More than $7 million of users’ funds was drained from BurgerSwap last night.

BurgerSwap Suffers Attack

Flash loan attackers are increasingly targeting Binance Smart Chain applications. This time, it was Uniswap clone BurgerSwap that got exploited. Last night, an attacker borrowed funds from PancakeSwap to unbalance the liquidity pools on BurgerSwapm then emptied them before returning the loan.

BurgerSwap posted a breakdown of the incident on Twitter earlier this morning.

The attack was worth roughly $7.2 million. Some of the funds are now on the Ethereum blockchain, while some BURGER tokens have been left on Binance Smart Chain. BurgerSwap is one of Binance Smart Chain’s leading applications. It was launched last year and has similar code to Uniswap’s V2. However, as Uniswap founder Hayden Adams noted, BurgerSwap’s code misses out a crucial line responsible for securing its liquidity pools. Adams reacted to the attack by noting that the pools were very susceptible to this type of flash loan attack without the line of code before adding “iWoNDerWhYTHeyDiDtHAt.”

Many Binance Smart Chain projects have suffered exploits recently, and suspicions of inside jobs have been running high. In some examples, such as the case of Uranium Finance, key parts of the code used by other projects have been omitted or changed. Both Uranium Finance and BurgerSwap are run by anonymous teams, which would reduce the accountability in the event of an inside job.

Meerkat Finance, a copy of Yearn Finance, suffered a suspected rug pull worth $30 million. Last week, Bunny Finance was exploited by a flash loan attack, leading the price of the BUNNY governance token to drop by 96%.

This year alone, the total losses from attacks on Binance Smart Chain projects are now comfortably in the tens of millions of dollars.

Disclaimer: The author held BTC, ETH, and several other cryptocurrencies at the time of writing.

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Cream Finance Launches Cross-Protocol Flash Loans

Key Takeaways

  • Cream Finance’s Iron Bank will enable protocol-to-protocol flash loans.
  • Binance Smart Chain and Fantom users will also be able to leverage flash loans through the protocol.
  • Flash loans are one of DeFi’s most radical innovations, but they’ve been very divisive.

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Cross-protocol flash loans are coming to Cream Finance. 

Protocol-to-Protocol Flash Loans on Cream Finance

The lending protocol will allow other protocols to borrow from its pools through its Iron Bank feature. The Iron Bank currently has over $337.9 million in Total Value Locked (TVL). It’s currently integrated with Alpha Homora V2 and Yearn Finance’s Vaults.

Cream is the first project to enable cross-protocol flash loans. 

Leo Cheng, co-founder and project lead at Cream Finance, spoke of the benefits the feature will offer DeFi users. He said: 

“Bringing protocol-to-protocol flash loans to DeFi will increase capital efficiency and provide deeper liquidity for traders looking to access more lucrative lending services across a wider variety of digital assets.”

As it will work in Yearn Finance, strategists will have the ability to use the flash loans to optimize returns on their assets at lower costs (Yearn Finance integrates several protocols, saving users gas fees). In addition to the Ethereum ecosystem, the instant loans will also be available on Binance Smart Chain and Fantom through Cream V1. 

Notably, flash loans on Cream will incur a 0.03% fee—a fraction of the cost of using Aave and Uniswap. It will also include liquidity provider tokens. 

Flash loans allow a trader to borrow an unlimited amount of capital without providing any collateral, as long as they pay back the debt in the same transaction. They’re frequently used in profit-making strategies like arbitrage and collateral swapping. 

They’re also controversial. Flash loans have played a central role in some of DeFi’s biggest attacks. Since Aave pioneered the innovation in early 2020, millions have been lost through hackers leveraging flash loans to capitalize on smart contract exploits. 

This year, Cream Finance has seen rapid growth, briefly halted by an Alpha Finance exploit in February (Alpha integrates Cream, which led to some confusion surrounding the root cause). ALPHA and CREAM plummeted when news of the exploit broke, and Cream’s TVL dropped around 70%. CREAM’s market cap is around $103.1 million today. It’s trading at $152.47.

Disclosure: At the time of writing, the author of this feature owned ETH, ALPHA, AAVE, and several other cryptocurrencies. They also had exposure to UNI in a cryptocurrency index. 

This news was brought to you by ANKR, our preferred DeFi Partner.

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