Hypernative's detection of an exploit targeting the premier lending protocol on the Flare Network helped avert a worst-case scenario
On Oct. 31, Kinetic Market, the premier lending protocol on the Flare Network, was able to save $5M thanks to a detection by Hypernative that alerted the protocol to an exploit in progress.
The hacker utilized flash loans and exploited a permission vulnerability in a whitelisted liquidator, masquerading as a Uniswap pool. The attacker then performed a sophisticated price manipulation exploit and leveraged the combination of a collateral factor on kUSDT and a liquidation bonus to make self-liquidation profitable.
Hypernative first detected that an exploit was being staged at 08:19:55 UTC, when the attacker created their first contract. The system raised an alert about an impending attack at 8:26:02, before the first hack transaction, when a failed transaction revealed the target of the exploit. Kinetic was able to pause the market shortly after, limiting the loss to a fraction of possible damages. Kinetic said that all of the users will be made whole.
The accuracy of Hypernative's detection and the speed with which they responded helped avert the worst-case scenario. We have finalized the process to automate the pause function that was used so successfully in this incident to make our response to future exploits even faster and more effective.
Lindsay Ironside
Co-founder @ Kinetic
This type of attack is usually out of an audits scope, as it involves a specific configuration (not the code itself), certain market conditions, and issues with third-party code. Hypernative's machine learning models identified the hack using out-of-the-box detection settings available to all platform customers.
Kinetic's experience is proof of the tangible returns projects get from proactive investment in security. In August, the protocol joined the ecosystem-wide security umbrella offered in the partnership between Hypernative and Flare and immediately upgraded its monitoring to unlock automated onchain response capability. Kinetic was already in the process of enabling automated pause functionality at the time of the attack.
The Hypernative Chain Program covers a broad range of attack surfaces and risk vectors including bridges, internal infrastructure smart contracts, multisig wallets, treasury and token allocations, and more. Projects building on Flare get access to Hypernative Platform and receive assistance in configuring and setting up security monitoring and prevention flows.
Read more: Flare Activates Ecosystem-Wide Protection With Hypernative
We see a growing number of chains going beyond the standard security protocol to make sure that the most important projects in their ecosystem are protected too. This incident is a perfect example of how a protocol, a chain and a security provider can work together to save the day.
Gal Sagie
Co-founder @Hypernative
Over 150 Web3 projects already rely on Hypernative’s real-time enterprise-grade platform that monitors over $100B worth of digital assets across 45 chains. In addition to Flare, the list of blockchains choosing Hypernative's ecosystem protection package includes Solana, Starknet, Mode, Zircuit, Astar, Berachain, Sei, Stacks, Stellar, and Kinto.
Hypernative uses battle-tested, sophisticated machine learning models, heuristics, simulations, and graph-based detections to identify threats with high accuracy and give customers precious minutes to respond before exploits can do damage. The system monitors security, technical, financial, governance and other risks. Hypernative detected 99.5% of hacks last year with less than 0.001% false positive rate and saved more than $500M of funds to date.
Reach out to find out how you can leverage the Hypernative and Fordefi integration and secure everything you build, run, and own in Web3.
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