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Inverse Finance Hack

  • Project: Inverse Finance
  • Exploit_type: Price Oracle Manipulation (via Flash Loan)
  • Loss: ~$15.6 million
  • Entry_point: anchorRouter contract and price oracle dependency
  • Exploit_vector: Manipulated token price oracle using flash loans to borrow undercollateralized assets
  • Severity: Critical
  • Attack_steps:
    • Attacker flash loaned large amounts of WBTC from a lending protocol.
    • Used WBTC to manipulate the price of INV/wETH on decentralized exchanges.
    • This skewed the price oracle used by Inverse’s lending system.
    • Deposited manipulated collateral (e.g., INV) into Inverse Finance’s Anchor lending protocol.
    • Borrowed large quantities of DOLA, ETH, WBTC, and YFI against inflated collateral.
    • Exited positions and repaid flash loans, extracting ~$15.6M in profit.
  • Impact: DOLA stablecoin depegged temporarily; several core assets drained from Anchor
  • Exploitability: High
  • Root_cause: Use of non-TWAP oracle relying on easily manipulable on-chain token pairs
  • Resource:Link