Another unfortunate security incident has hit the DeFi ecosystem. Allbridge Core, a cross-chain stablecoin bridge, has temporarily suspended its Solana network pool following a flash loan attack that resulted in a loss of approximately $1.65 million.

The attack appears to have been quite sophisticated; the attacker reportedly used a flash loan to borrow $1.12 million in USDC from Kamino, which allowed them to instantly distort the exchange rate of the USDC/USDT pool. They then drained liquidity at the manipulated rate to pocket the difference, and those funds have reportedly already been bridged to Ethereum and mixed through privacy protocols.

Ultimately, this has once again exposed the structural vulnerabilities of bonding curves in cross-chain bridges. Price manipulation via flash loans remains a chronic headache for DeFi, and it's bitter to see that it wasn't successfully prevented this time either.

Allbridge has stated that they have temporarily suspended the bridge and are working on a response, so if you're a user in the related ecosystem, please keep a close eye on updates until further notice regarding the pool's resumption!

Related Links