The QiDao decentralised finance protocol has been attacked, resulting in the loss of $20 million worth of cryptocurrencies. The attack was caused by a flaw in Superfluid, an external contract operated by QiDao.
QiDao (QI) protocol under attack
The information was confirmed on the Twitter page of QiDao (QI). The decentralised finance protocol (DeFi), based on the Polygon network, has suffered a loss of $13 million in cryptocurrencies after a security breach was exploited. However, the breach did not affect it directly, but an external procurement contract deployed using Superfluid.
Today at 6.48am GMT we were notified of a potential exploit of the QiDAO vesting contract that leverages Superfluid code. We are investigating the incident and will keep you updated in this thread and our Discord server.
– Superfluid (@Superfluid_HQ) February 8, 2022
As Superfluid and QiDao continue to investigate the origin of the attack, on-chain data reveals that the attacker made off with $20 million.
This includes 24 WETH, 562,000 USDC, but also 19.4 million IQs, valued at $12 million at the time of the attack. At the time of writing, approximately $8 million is still being held at the attacker’s address
View of one of the Superfluid hacker’s transactions (Source: PolygonScan)
For now, the QiDao team assures that user funds and the various pools are safe. According to initial reports, the stolen tokens belonged only to team members and long-time investors.
Superfluid is a protocol that allows users to move assets from one portfolio to another in a constant, real-time stream. Qi Dao, also known as Mai Finance, is a platform that is particularly popular for its free stablecoin borrowing features.
QiDao’s IQ plummets by 80%
As explained above, Mai Finance users’ funds were not put at risk. Instead, the hacker attacked the QI tokens stored on the protocol by the project team itself. In total, no less than 12 million QI tokens were stolen.
However, the attacker did not keep these freshly stolen tokens for long. Very quickly, they were sold for Wrapped Ether (wETH) on the Quickswap exchange. As a result, the price of IQ dropped by almost 90% in just over an hour, from around $1.23 to $0.13.
QiDao IQ price (Source: TradingView)
As can be seen in the chart above, the IQ has quickly recovered. After it was confirmed that the security breach did not directly affect the QiDAO protocol, the price printed almost 400%. The token is currently trading for $0.68.
