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Curve Finance Investigates $240,000 sDOLA LlamaLend Exploit Affecting Inverse Finance

Curve Finance is examining an attack on the sDOLA LlamaLend market that combined oracle behavior with collateral imbalance, triggering borrower liquidations while leaving lenders unaffected.

Summary

Curve Finance is investigating a $240,000 exploit targeting the sDOLA market on Inverse Finance’s LlamaLend. The attack combined specific oracle behavior with an imbalance in sDOLA collateral, resulting in the liquidation of borrowers who used sDOLA, while lenders were not impacted. The team is reviewing additional markets for similar vulnerabilities and has stated it is strengthening security measures for the upcoming LlamaLend V2.

Terms & Concepts
  • sDOLA: A staked or synthetic version of the DOLA stablecoin used within DeFi protocols as collateral in lending markets.
  • LlamaLend: A decentralized lending protocol associated with Curve and Inverse Finance that enables users to borrow assets against crypto collateral.
  • Oracle: A blockchain-based price feed mechanism that supplies external market data to smart contracts for functions such as collateral valuation and liquidations.