Solana-Based Stablecoin Suffers Flash Loan; Drops 90%

Paigambar Mohan Raj
Source: NBC News

The Solana-based algorithmic stablecoin, Nirvana, was supposedly attacked by a flash loan. According to the Twitter user “FA2 | SolanaFM“, the exploit amounted to $3.49 million.

Nirvana has two tokens, a stablecoin NIRV, and ANA, a volatile asset with a reserve-backed rising floor price. Both tokens witnessed a massive drop in the last few hours. Their stablecoin NIRV has dropped by nearly 90%.

Source: Coingecko

On the other hand, ANA has dropped by almost 84%.

Source: Coingecko

How was the exploit carried out? Solana FM explains

Solana FM has explained the key movements during the exploit. Two key accounts were involved – the Nirvana Treasury account and the Nirvana hacker account. Both accounts have been tagged on the Solana FM explorer.

Source: FA2 | SolanaFM

The hacker utilized Solend Protocol’s flash loans to borrow $10 million USDC from the main pool vault. This amount was then used to exploit $3.49 million from the Nirvana Finance treasury.

Source: FA2 | SolanaFM

Using the borrowed funds, the hacker minted $10M+ worth of $ANA. Thereafter, the hacker swapped the $ANA for USDT and received $3.5 million from the Nirvana treasury. Moreover, the $10 million USDC was then returned to the Solend pool.

Furthermore, the team even explained the hackers’ exit strategy. The hacker converted the USDT to USDCet, transferring the funds to an ETH account via Wormhole.

Source: FA2 | SolanaFM

Flash loans have been a plague in the crypto industry of late. Moreover, this is not the first time a Solana-based project has been hit. In early July, the CremaFinance Defi protocol was exploited for $8.7 million.

At press time, ANA was trading at $1.14, down by 19% in the last hour. Meanwhile, the stablecoin NIRV was trading at $0.099004, down by 38.8% in the last hour.