Azoundria: Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/arcadiafinancerebalancerswapdatadelegatedpowerabuse.php}} {{Unattributed Sources}} Arcadia Finance Logo/HomepageArcadia Finance, a DeFi platform known for its automated liquidity strategies, was exploited via its rebalancer contract, which allowed arbitrary "swapData" execution. The attacker stole approximately $3.5 million in assets, including 2.3M USD..."

2025-07-28T23:46:36Z

Created page with "{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/arcadiafinancerebalancerswapdatadelegatedpowerabuse.php}} {{Unattributed Sources}} thumb|Arcadia Finance Logo/HomepageArcadia Finance, a DeFi platform known for its automated liquidity strategies, was exploited via its rebalancer contract, which allowed arbitrary "swapData" execution. The attacker stole approximately $3.5 million in assets, including 2.3M USD..."

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{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/arcadiafinancerebalancerswapdatadelegatedpowerabuse.php}}
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[[File:Arcadiafinance.jpg|thumb|Arcadia Finance Logo/Homepage]]Arcadia Finance, a DeFi platform known for its automated liquidity strategies, was exploited via its rebalancer contract, which allowed arbitrary "swapData" execution. The attacker stole approximately $3.5 million in assets, including 2.3M USDC and 227k USDS. In response, Arcadia issued urgent warnings for users to disconnect rebalancers and revoke token permissions, and later introduced a bounty of up to $360,000 for information leading to fund recovery. The platform initially gave the exploiter a 12-hour window to respond but did not offer a traditional bounty deal, and as of now, no funds have been recovered.<ref name="arcadiafinancetweet1-20576" /><ref name="cyversalertstweet1-20577" /><ref name="cyversalertstweet2-20578" /><ref name="ainvest-20579" /><ref name="cointelegraph-20580" /><ref name="theblock-20581" /><ref name="certikalerttweet-20582" /><ref name="certikbase1-20583" /><ref name="certikbase2-20584" /><ref name="revokecash-20585" /><ref name="getfailsafe-20586" /><ref name="arcadiafinancehomepage-20587" /><ref name="fjordfoundry-20588" /><ref name="ethereumecosystem-20589" /><ref name="messaricompetitors-20590" /><ref name="tenderlyblog-20591" /><ref name="linkedin-20592" />

== About Arcadia Finance ==
Arcadia is a DeFi platform designed to simplify and optimize liquidity management across decentralized exchanges (DEXs) such as Uniswap, Aerodrome, and Alienbase. It enables users to manage, automate, and leverage liquidity positions with minimal effort through a unified interface. Users can compare yield opportunities across different pools and DEXs, select from curated strategies, and access top-performing token pairs—from major assets like ETH and BTC to trending memecoins. Arcadia supports a wide range of tokens and liquidity positions, making it accessible to both retail and institutional investors seeking yield and capital efficiency.

Arcadia offers a variety of advanced automated strategies with varying risk profiles and leverage options. These include Pseudo Delta Neutral strategies (ETH or USD-focused), Bullish or Bearish Crypto strategies, and more, with potential APYs ranging from around 30% to over 680%. Each strategy outlines leverage limits, supported pools, and risks such as interest rate volatility and liquidation. With one-click execution, users can borrow, swap, and provide liquidity simultaneously, enhancing yield while maintaining relative control over risk exposure. Tools also allow users to customize parameters like tick ranges and leverage for precision optimization.

The platform is audited by multiple firms (including Sherlock and bytes032), and is backed by leading investors like Coinbase Ventures and Mechanism Capital. Arcadia is trusted by a growing DeFi community for its intuitive UI, transparency, and responsive support. Institutions and large capital allocators can collaborate directly with Arcadia to develop tailored strategies and access deep liquidity. With no lockups or withdrawal fees, Arcadia is also a viable passive income source for lenders. The community continues to praise the protocol’s usability, risk controls, and continuous product improvement.

== The Reality ==
This sections is included if a case involved deception or information that was unknown at the time. Examples include:

* When the service was actually started (if different than the "official story").
* Who actually ran a service and their own personal history.
* How the service was structured behind the scenes. (For example, there was no "trading bot".)
* Details of what audits reported and how vulnerabilities were missed during auditing.

== What Happened ==
Arcadia Finance was exploited through its rebalancer contract, resulting in a $3.5 million loss.
{| class="wikitable"
|+Key Event Timeline - Arcadia Finance Rebalancer swapData Delegated Power Abuse
!Date
!Event
!Description
|-
|July 14th, 2025 10:05:58 PM MDT
|Reported Time Of Attack
|The reported time of the attack happening.
|-
|July 14th, 2025 10:48:00 PM MDT
|CertiK Alert Tweet Posted
|CertiK posts a tweet notifying of the incident happening. At this time, losses are reported as $1.6m.
|-
|July 14th, 2025 10:57:00 PM MDT
|Arcadia Finance Posts Announcement
|Arcadia Finance posts a public acknowledgement that they have detected unauthorized activity.
|-
|July 15th, 2025 12:44:00 AM MDT
|Cyvers Reports Initial Attack
|Cyvers reports the initial attack for 2.5M USD against Arcadia Finance.
|-
|July 15th, 2025 2:50:00 AM MDT
|Cyvers Reports More Attacks
|Cyvers reports additional attacks happening for another $1m USD in multiple transactions.
|-
|July 15th, 2025 4:47:00 AM MDT
|The Block Article Posted
|The Block shares an article about the incident.
|}

== Technical Details ==
The exploiter seems to use arbitrary "swapData" on their rebalancer contract to execute the exploit.

== Total Amount Lost ==
Stolen tokens include 2.3M USDC, 227k USDS, plus an additional $1m USD worth of tokens.

Because the $1m USD happened subsequent to the other tokens, some sources report $2.5m USD being taken, while others report $3.5m USD.

The total amount lost has been estimated at $3,600,000 USD.

== Immediate Reactions ==
Arcadia Finance originally posted a notice:

"The team is aware of unauthorized transactions via a Rebalancer. Remove all permissions for asset managers. More information will follow."

They provided instructions for users to disconnect their wallets and stop losing funds.

== Ultimate Outcome ==
Warning showing up on the homepage:
"DISCONNECT REBALANCERS AND COMPOUNDERS FROM YOUR ACCOUNTS. We've detected unusual activity affecting automation features. Please disconnect all rebalancers and compounders from your account now. Also revoke access to all ERC20 tokens the account had access to."

Arcadia Finance offered the attacker a 12 hour window in which they could contact the team. Their post was highly threatening to the exploiter, and did not appear to offer a 10% bounty.

A bounty of $360,000 USD was paid for the discovery.

== Total Amount Recovered ==
There is no indication that any funds have been recovered.

There do not appear to have been any funds recovered in this case.

== Ongoing Developments ==
Arcadia Finance has introduced a bounty for information that leads to the recovery of the funds, with rewards up to $360,000 USD.
== Individual Prevention Policies ==
{{Prevention:Individuals:Placeholder}}

{{Prevention:Individuals:End}}

== Platform Prevention Policies ==
{{Prevention:Platforms:Placeholder}}

{{Prevention:Platforms:End}}

== Regulatory Prevention Policies ==
{{Prevention:Regulators:Placeholder}}

{{Prevention:Regulators:End}}

== References ==
<references><ref name="arcadiafinancetweet1-20576">[https://twitter.com/ArcadiaFi/status/1945561599433216268 Arcadia Finance - "We will allow the attacker a 12h grace period starting now to contact us, after which a bug bounty will be opened rewarding 10% of funds returned if the intel leads to a recovery." - Twitter/X] (Accessed Jul 17, 2025)</ref>

<ref name="cyversalertstweet1-20577">[https://twitter.com/CyversAlerts/status/1945011492203421697 Cyvers Alerts - "ALERT Today, our system has detected a multiple suspicious transaction involving @ArcadiaFi on #Base with loss of 2.5M." - Twitter/X] (Accessed Jul 17, 2025)</ref>

<ref name="cyversalertstweet2-20578">[https://twitter.com/CyversAlerts/status/1945043365340270936 Cyvers Alerts - "UPDATE @ArcadiaFi attacker has just executed another ~$1M from #arcadia in multiple transactions!" - Twitter/X] (Accessed Jul 17, 2025)</ref>

<ref name="ainvest-20579">[https://www.ainvest.com/news/arcadia-finance-loses-2-5-million-defi-exploit-2507/ Arcadia Finance Loses $2.5 Million in DeFi Exploit - AInvest] (Accessed Jul 17, 2025)</ref>

<ref name="cointelegraph-20580">[https://cointelegraph.com/news/arcadia-finance-exploit-2-5m-crypto-theft Arcadia Finance exploited, $3.5M stolen and converted to WETH - CoinTelegraph] (Accessed Jul 17, 2025)</ref>

<ref name="theblock-20581">[https://www.theblock.co/post/362624/arcadia-hack $3.5 million exploit hits DeFi platform Arcadia on Base - The Block] (Accessed Jul 17, 2025)</ref>

<ref name="certikalerttweet-20582">[https://twitter.com/CertiKAlert/status/1944982279882997819 CertiK Alert - "We have detected multiple suspicious transactions on Base... The exploiter took ~$1.6M from @ArcadiaFi, likely through arbitrary 'swapdata' on its rebalancer contract." - Twitter/X] (Accessed Jul 17, 2025)</ref>

<ref name="certikbase1-20583">[https://skylens.certik.com/tx/base/0x06ce76eae6c12073df4aaf0b4231f951e4153a67f3abc1c1a547eb57d1218150 First Attack Transaction - CertiK Skylens] (Accessed Jul 17, 2025)</ref>

<ref name="certikbase2-20584">[https://skylens.certik.com/tx/base/0x0b9bed09d241cef8078e6708909f98574c33ee06abcc2f80bc41731cd462d60b Second Attack Transaction - CertiK Skylens] (Accessed Jul 17, 2025)</ref>

<ref name="revokecash-20585">[https://revoke.cash/exploits/arcadia-finance?chainId=8453 Arcadia Finance Hack - Revoke.Cash] (Accessed Jul 17, 2025)</ref>

<ref name="getfailsafe-20586">[https://getfailsafe.com/arcadia-finance-hack-2025-what-we-know-so-far/ Arcadia Finance Hack 2025 – What We Know So Far - GetFailSafe] (Accessed Jul 17, 2025)</ref>

<ref name="arcadiafinancehomepage-20587">[https://arcadia.finance/ Arcadia Finance Homepage] (Accessed Jul 17, 2025)</ref>

<ref name="fjordfoundry-20588">[https://app.fjordfoundry.com/token-sales/0x5c83340873Aac3608fcb94A1C3dF14ca59894267 Arcadia Finance - Fjord Foundry] (Accessed Jul 17, 2025)</ref>

<ref name="ethereumecosystem-20589">[https://www.ethereum-ecosystem.com/apps/arcadia-finance Arcadia Finance - Ethereum Ecosystem] (Accessed Jul 17, 2025)</ref>

<ref name="messaricompetitors-20590">[https://messari.io/project/arcadia-finance/protocols/arcadia-finance/competitors?page=19 Competitors To Arcadia Finance - Messari] (Accessed Jul 17, 2025)</ref>

<ref name="tenderlyblog-20591">[https://blog.tenderly.co/case-studies/arcadia-finance/ How Arcadia Finance Integrates Virtual TestNets at Each Stage of Development - Tenderly Blog] (Accessed Jul 17, 2025)</ref>

<ref name="linkedin-20592">[https://www.linkedin.com/company/arcadia-finance/ Arcadia Finance - LinkedIn] (Accessed Jul 17, 2025)</ref></references>

Arcadia Finance Rebalancer swapData Delegated Power Abuse - Revision history