Pike Finance, a protocol supported by Circle, suffers a $1.6 million loss

Pike Finance, a decentralized finance protocol specializing in cross-chain lending, has experienced a substantial loss of over $1.6 million in altcoins due to a hacking attack. In a post on May 1, the official Pike Finance account revealed that the Pike Beta protocol was exploited on Ethereum, Arbitrum, and Optimism, resulting in the loss of 99,970.48 ARB, 64,126 OP, and 479.39 ETH.

The Pike Finance team attributes the exploit to a “USDC vulnerability” that previously caused the protocol to lose $299,127 in stolen USDC across Ethereum, Arbitrum, and Optimism. In an Apr. 28 post-mortem report, the team explained that the weak security measures in the functions managing USDC transfers via the cross-chain transfer protocol were responsible for the loss of assets.

This time, the vulnerability caused a “misalignment in storage mapping,” which altered the behavior of the protocol’s smart contract. This allowed attackers to bypass admin access and withdraw funds. The team has offered a 20% reward for the return of the funds or for any information that leads to their recovery.

Pike Finance, launched in 2023, received $50,000 in funding in USDC from Circle and Wormhole to facilitate the launch of its mainnet in early Q1 of 2024. As a cross-chain liquidity provider, Pike Finance enables users to supply and borrow native assets on various blockchain and sidechain networks.