The decentralized lending protocol Sonne Finance recently fell victim to a significant hack resulting in a loss of approximately $20 million. This hack occurred earlier today and was linked to a security vulnerability in the Compound v2 forks used by Sonne Finance. The hacker exploited this vulnerability through a known donation attack, as detailed in the project’s post-attack report.
All Markets on Optimism Network Paused
Sonne Finance swiftly responded to the hack by immediately pausing all markets on the Optimism network. Markets on the Base network continued to operate. This action followed the advice of the blockchain security company PeckShield, which recommended Sonne Finance review its time-lock contract. The Sonne Finance team became aware of the issue 25 minutes after the hack and quickly took steps to mitigate further damage.
The report detailing the attack explained the sequence of events leading to the hack. Sonne Finance had recently proposed to include VELO markets on its platform, with transactions planned on a multisig wallet with a two-day time lock. The hacker exploited this time lock, executing four transactions as soon as the two-day period ended and then adding a c-factor to the markets.
Stolen Funds Not Recovered
Despite the quick detection and intervention, Sonne Finance acknowledged that the stolen funds had not been recovered. However, the investigation into the hacker’s identity is ongoing. The team expressed their determination to identify the hacker and are considering all options to achieve this goal.
Sonne Finance added that they are willing to offer a reward to the hacker in exchange for the return of the stolen funds. Although the details of the reward offer were not disclosed, this approach reflects a common strategy in the cryptocurrency market to encourage the safe return of stolen assets.
This incident is the latest example of ongoing issues and vulnerabilities in decentralized finance (DeFi) protocols. It also highlights the importance of strong security measures and rapid response to hack attacks.
