Zunami Protocol Loses $2.1 Million to Price Manipulation Attack

Hackers stole over $2.1 million from Zunami Protocol, a stablecoin staking platform with a price manipulation attack. Due to the hack, the native stablecoin has dropped to zero.

While Curve Finance recovered a major portion lost in a recent hack, attackers targeted Zunami Protocol to steal funds.

Hackers Funneled Funds Through Tornado Cash

Blockchain security firm PeckShield said that Zunami Protocol had lost over $2.1 million to hacks from its Curve Pool. It identified that hackers inflated the native stablecoin Zunami USD (UZD) price. PeckShield explained:

“It is a price manipulation issue, which can be exploited by donation to incorrectly calculate the price.”

The hackers then sent the funds to crypto mixer Tornado Cash in various batches. PeckShield shared the flow of stolen funds below.

Zunami Protocol confirmed the hack and informed the users that they were conducting investigations. The platform provides 14% APY on stablecoin staking, claiming it to be the highest in the market. Meanwhile, UZD has lost its peg, trading nearly at zero due to the impact of the hack.

Curve Finance Hack 

Zunami Protocol’s Curve Pool was drained days after Curve Finance recovered over 70% of the stolen funds from the reentrancy hack. On Aug. 12, BeInCrypto reported that Curve Finance would start reimbursing users after recovering a major portion of the funds due to the efforts of white hat hackers.

Last month, some pools of Curve Finance lost over $50 million due to the malfunctioning reentrancy lock.

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