DeFi protocol Gamma Strategies suffers an estimated $3.4 million exploit

Decentralized finance protocol (DeFi) Gamma Strategies suffered an exploit that resulted in a loss of approximately $3.4 million, according to security analysts.

The Protocol took immediate action to prevent further losses. The team has disabled deposits to all public DeFi vaults while ensuring withdrawals remain active for users who need access to their funds.

“Our vaults will continue to be operated as normal for the time being, but the deposits are currently closed until we identify and resolve the issue,” the team said. said.

Security companies PeckShield and BlockSec both told The Block that the incident resulted in an estimated loss of $3.4 million, with the hacker taking over 1,500 ether. BlockSec’s analysis points to a critical vulnerability in the protocol’s “accounting mechanism.”

“The root cause stems from the inconsistency between the deposit and withdrawal accounting mechanisms used by Gamma Strategies, resulting in a mismatch between liquidity and shares,” BlockSec founder Yajin Zhou told The Block. “By taking advantage of this, the attacker can withdraw an excessive number of tokens.”

Gamma Strategies is a decentralized asset management protocol built on Ethereum and other blockchains. It allows users to deposit money into pools called “hypervisors” and earn a return on their investment through active liquidity management and market-making strategies.

Gamma Strategies did not immediately respond to a request for comment.