Arbitrum Token Surges As Radiant Capital Gets Hacked for $4.5M

Key Insights

• A hacker recently exploited a rounding error in the platform's code to steal millions in ETH, forcing Radiant to shut down lending markets.
• Arbitrum, the native cryptocurrency of the Arbitrum protocol where the Radiant Capital attack occurred, has been in a constant rally for more than a week now.
• The hacker manipulated a USDC market parameter using a flash loan, causing a smart contract malfunction.
• This adds to a string of recent high-profile hacks, including Orbit Chain ($81.5M) and Badger DAO ($120M).
• $ARB has seen a surprising 70% increase in the past month despite the attack.
• Radiant Capital assures users that funds are safe and promises investigation and swift resumption of operations.

This week, a hacker used a rounding error in the code of the cross-chain lending protocol Radiant Capital, to steal $4.5 million worth of Ethereum (ETH).

At the time of writing, the company has shut down its lending markets.

How The Hack Happened

A report published by the blockchain security platform Beosin claims that the hacker altered the index parameter of one of the new USD Coin (USDC) markets on Radiant Capital by using a flash loan technique.

Beosin says that the hacker was able to change this index parameter to a very large number, causing a smart contract in the platform to malfunction. Using this accuracy mistake, the attacker was then able to take out more money than they had put in.

By repeating this method, the hacker was able to withdraw about $4.5 million in Ethereum, and remains at large, even at the time of writing.

In a statement posted on its website, Radiant Capital confirmed the attack and reassured consumers that no more monies were in danger.

Radiant Capital also says that the lending and borrowing markets on Arbitrum where the attack happened, have been halted by the protocol.

The protocol has pledged to investigate the issue and get back into operation as soon as possible.

The Rising Trend Of Crypto Hacks

The incident at Radiant Capital is only one out of the many attacks on the crypto market so far. In recent months, hackers have stolen hundreds of millions from the crypto market, with the latest one being the incident at Orbit Chain, which was hacked for $81.5 million in December 2023.

Prior to that in November, Badger DAO lost $120 million in a flash loan attack that exploited a bug in its smart contracts. 

In October Cream Finance was drained of $130 million in a flash loan attack that is similar to the current one. And in September, pNetwork was hacked for $12.7 million in yet another flash loan attack.

Overall, it seems that flash loans are one of the most popular exploits in the blockchain space

What is interesting, however, is how Arbitrum, the native cryptocurrency of the Arbitrum protocol where the Radiant Capital attack occurred, has been in a constant rally for more than a week now.

Arbitrum currently sits at around $1.87 and is up by an amazing 70% over the last month.

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