Euler Finance was attacked by $200 million, and several DeFi projects suffered cascading losses

As one of the few innovative projects in the DeFi field in recent years, Euler Finance has designed a unique lending authority system by grading assets according to risk. However, on March 13, the project was hacked and lost about $200 million, which attracted widespread attention in the industry.

As the underlying lending protocol, the security of Euler is particularly important. Due to the highly interconnected nature of the DeFi ecosystem, the attack also affected a number of other DeFi projects, causing tens of millions of dollars in cascading losses.

! Pandora’s box of DeFi composability: Euler Finance was attacked, and these 11 DeFi projects suffered losses

Angle Protocol is a decentralized project focused on non-USD stablecoins, mainly offering the euro stablecoin agEUR. There are two ways for users to mint agEUR: one is to exchange it 1:1 with stablecoins such as USDC, and the other is to overcollateralize other assets such as WETH for minting. In order to increase returns, Angle has adopted a strategy similar to Yearn, depositing some of its funds into platforms such as Euler. As a result of the attack, Angle lost about $17.61 million, and although there was a partial surplus, it was not enough to pay the full amount.

A DEX platform suffered a loss of approximately $11.9 million due to bbeUSD, an enhanced Euler-based USD pool. The platform’s previously launched innovative Boosted Pools feature was designed to boost LP yields and facilitate users to access lending protocols, but it also indirectly amplified the loss. Multiple trading pairs using bbeUSD are affected, and LPs can only partially redeem their funds.

Idle Finance offers three strategies as a yield aggregator, with the riskier Junior Tranches likely to be the first to bear losses. Idle has diversified its funds across multiple projects to achieve high yields, and its exposure to Euler is approximately $10.99 million.

Yield Protocol is a fixed-rate lending protocol with a liquidity pool partially built on top of Euler. Less than $1.5 million is expected to have been deposited into Euler prior to the attack, while borrowers’ collateral was not affected as it was stored internally in Yield Protocol.

A revenue aggregation platform said that some of its products have about $1.38 million exposure to Euler due to the use of Idle and Angle strategies. The platform will be covered by the Treasury for bad debts, guaranteeing that all Vaults are functioning properly.

Another revenue aggregation platform, Harvest’s USDC, USDT, WETH Vault has also been affected by the use of Idle, and no specific treatment plan has been announced.

Inverse Finance’s USD stablecoin DOLA suffered a loss of approximately $860,000 in liquidity pools on a DEX.

SwissBorg is a regulated crypto asset management platform that lost 1,617.23 ETH and about 1.69 million USDT in its ETH and USDT yield strategies, respectively, accounting for 2.27% and 29.52% of the total subscription funds. The platform undertakes to bear all losses.

Opyn’s Zen Bull strategy, a decentralized options protocol, may have been damaged by collateralized lending at Euler, and the exact amount of the loss has not been disclosed.

DeFi security provider Sherlock previously entered into a $10 million partnership with Euler for smart contract auditing and insurance. In the aftermath of the attack, Sherlock approved and partially executed a $4.5 million payout to Euler.

Sense Finance, a fixed-rate lending protocol, has been indirectly impacted by trading fixed-income assets that include items such as Idle.

! Pandora’s box of DeFi composability: Euler Finance was attacked, and these 11 DeFi projects suffered losses