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{{Imported Case Study With About|source=https://www.quadrigainitiative.com/casestudy/zunamiprotocolcompromisedadminallcollateraldrained.php}}
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[[File:Zunamiprotocol.jpg|thumb|Zunami Protocol Logo/Homepage]]Zunami Protocol is a decentralized finance platform that optimizes yield by issuing aggregated stablecoins like zunUSD and zunETH, backed by diversified assets managed in omnipools across major DeFi platforms. Governed by ZUN token holders through DAO voting, it offers around 20% APY with automated portfolio rebalancing and strong decentralization features. However, a recent exploit occurred when an attacker gained control of an admin-level wallet, withdrew $500,000 in collateral, and quickly laundered the funds through Tornado Cash. This protocol-level breach was beyond user control, and while the team acknowledged the hack and launched an investigation, reimbursement seems unlikely. The founder continues to probe the incident.<ref name="zunamiprotocoltweet1-20175" /><ref name="zunamiprotocoltweet2-20176" /><ref name="securrtechmedium-20177" /><ref name="securrtechtweet-20178" /><ref name="etherscanwallet-20179" /><ref name="thefttransaction1-20180" /><ref name="tornadocash1-20181" /><ref name="suplansyitweet-20182" /><ref name="opencovertwtter-20183" /><ref name="tenarmoralerttweet-20184" /><ref name="0xdavidtweet-20185" /><ref name="frogenomistweet-20186" /><ref name="rdauditorstweet-20187" /><ref name="tonykebottweet-20188" /><ref name="amlbothqtweet-20189" /><ref name="newmichwilltweet-20190" /><ref name="peckshieldalerttweet-20191" /><ref name="web3watchdogtweet-20192" /><ref name="zunamihomepage-20193" /><ref name="zunamirekt2-20210" /><ref name="teletype-20240" /><ref name="miogreendiscord-20241" />

== About Zunami Protocol ==
Zunami Protocol is a decentralized finance (DeFi) platform designed to optimize yield generation through aggregated stablecoins and omnipools. At its core, Zunami issues aggregated stablecoins like zunUSD and zunETH, which are backed by diversified assets in yield-generating strategies across various DeFi protocols. These assets are held in omnipools, which combine liquidity and flexibility, enabling efficient, decentralized, and profitable collateral management.

The omnipools are structured to maximize returns—offering users an average APY of around 20%—by distributing capital across multiple DeFi platforms such as Curve Finance, Convex Finance, Stake DAO, FRAX Finance, and C.R.E.A.M. Finance. The collateral within these pools is managed through DAO voting, ensuring that strategy adjustments are community-driven. Zunami’s Algorithmic Peg Stabilizer (APS) further ensures that stablecoin prices remain steady, automatically rebalancing portfolios and compounding yields.

The ZUN token powers governance and liquidity functions within the ecosystem. Holders can vote on protocol decisions, manage liquidity-as-a-service (LaaS), influence token emissions, and earn rewards through staking. Notably, ZUN stakers act as an additional collateral layer, reinforcing stability and receiving 100% of the protocol’s revenue in return.

Security-wise, Zunami has emphasized decentralization with no proxy contracts, DAO-based risk management, and independent audits. Its open documentation and Gitbook provide full technical transparency. In sum, Zunami Protocol is an innovative approach to stablecoin yield farming—combining aggregation, decentralization, and automated strategy execution.

== The Reality ==
Unfortunately, it appears that the private key for the Zunami Protocol was not held securely.

== What Happened ==
Zunami Protocol was exploited for approximately $500,000 after an attacker gained unauthorized access to a privileged wallet and withdrew collateral backing its stablecoins.
{| class="wikitable"
|+Key Event Timeline - Zunami Protocol Compromised Admin All Collateral Drained
!Date
!Event
!Description
|-
|May 14th, 2025 3:42:47 PM MDT
|First Emergency Withdrawal Transaction
|The first emergency withdrawal transaction on the Ethereum blockchain.
|-
|May 14th, 2025 3:52:59 PM MDT
|Funds Start Going To TornadoCash
|The stolen funds start being cashed out through TornadoCash.
|-
|May 15th, 2025 6:32:00 AM MDT
|Zunami Protocol Notification Tweet
|Zunami Protocol posts on Twitter with a very initial tweet noting that the zunUSD and zunETH have been stolen. They claim to be investigating the situation.
|-
|May 16th, 2025 12:18:04 AM MDT
|Analysis By Securrtech
|Securrtech publishes an analysis of the exploit on Medium. Securrtech’s analysis provides a detailed account of the $500,000 security breach that occurred on May 15, 2025. The report begins with an overview of the incident, noting that the attacker targeted the collateral backing Zunami’s flagship stablecoins, zunUSD and zunETH, and quickly moved the stolen funds through Tornado Cash to obscure their trail.
|-
|May 29th, 2025 10:49:00 AM MDT
|Update From Founder Sterx
|Sterx, the founder of Zunami Protocol, provides a Twitter/X update stating that the team is actively investigating the recent exploit and is considering both possibilities: a compromised deployer wallet or malicious intent by the key holder. They are collaborating with a professional investigator to uncover the root cause and have committed to sharing the full results of the investigation once they become available.
|-
|June 10th, 2025 6:33:00 AM MDT
|Update From Chief Technology Officer
|Zunami Protocol chief technology officer Mikhail Zelenin issued a personal apology for his absence following the hack, explaining he needed time to recover psychologically. He suspects the breach may have stemmed from Russian border police cloning his laptop during a border crossing, gaining access to unsecured source code. Despite transitioning to a DAO, some security updates were overlooked due to limited development resources, and he admits to making critical mistakes while managing the project alone.
|-
|June 13th, 2025 10:04:00 AM MDT
|Second Rekt Article Published
|Rekt News publishes a second article about Zunami Protocol which includes this exploit, after $500k goes missing from the protocol. The chief technology officer Mikhail Zelenin is a primary suspect, however he has a story about border security guards potentially holding his laptop for hours of analysis.
|}

== Technical Details ==
This exploit stemmed from a compromise of privileged access. The attacker appears to have obtained control over an admin-level wallet, which allowed them to withdraw and redeem protocol collateral without triggering traditional safeguards. Once the assets were redeemed, the attacker funneled the resulting ETH through a crypto mixer, effectively concealing their identity.

This was a protocol-level exploit, meaning end users could not have prevented the attack, and no action was required from them during the breach.

== Total Amount Lost ==
Sources all appear to consistently report the amount of the loss at $500k.

The total amount lost has been estimated at $500,000 USD.

== Immediate Reactions ==
It is reported that the team's first reaction on Discord was simply the word "Rekt".

The team later followed up to acknowledge the hack on Twitter/X.

== Ultimate Outcome ==
Funds were moved through TornadoCash within 10 minutes of the exploit. An investigation was started.

== Total Amount Recovered ==
Investigation is ongoing and there does not appear to be any hope of reimbursement.

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

== Ongoing Developments ==
The founder is reportedly still investigating the exploit. There are two theories being explored. The CTO Mikhail Zelenin provided an alternate explanation involving border security seizing the funds:

"Guys, I am deeply sorry for not being in contact with the community. It was very hard to receive the hack message again, so I spent some time with a specialist to get my psyche back to normal.

Phil, the founder Kirill has access to the key as well. I personally sent it to him in the beginning. Three of us have keys. My current hypothesis is that during my crossing of the Russian border, my laptop was deeply investigated by Russian police. I am not sure what software they have, but for many hours it was in police possession. All source codes of the protocol were there without cryptographic security.

The second problem is that during the switch to the DAO, the strategies weren't switched because I was sure that I had done it before. Because of the absence of investment in the protocol, I was the only developer and I was trying my best to support it, but I made simple mistakes even though the protocol was fully rewritten for safety.

I still don't have any other hypothesis except the cloning of my hard drive and investigating it at the airport border."
== 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="zunamiprotocoltweet1-20175">[https://twitter.com/ZunamiProtocol/status/1922993510925435267 Zunami Protocol - "The Zunami protocol has been hacked — the collateral for zunUSD & zunETH has been stolen. We are currently investigating the situation." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="zunamiprotocoltweet2-20176">[https://twitter.com/kirill_zunami/status/1928131508117651725 Sterx - "We’re investigating the exploit and considering both scenarios: a compromised deployer or malicious intent by the key holder. We're working with a professional investigator and will share the results of the investigation once available." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="securrtechmedium-20177">[https://securrtech.medium.com/zunami-protocol-hack-anatomy-of-a-500k-defi-exploit-99a4063ac61d Zunami Protocol Hack: Anatomy of a $500K DeFi Exploit - Securrtech Medium] (Accessed Jun 11, 2025)</ref>

<ref name="securrtechtweet-20178">[https://twitter.com/Securrtech/status/1923262174740222129 Securrtech - "Another DeFi hack hits the headlines! @ZunamiProtocol just lost $500K in an Access Control exploit. Want to know how it happened? Dive into our full breakdown." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="etherscanwallet-20179">[https://etherscan.io/address/0x051370419b871F7C05dEE8f7134401530832e250 Attacker's Wallet On Etherscan] (Accessed Jun 11, 2025)</ref>

<ref name="thefttransaction1-20180">[https://etherscan.io/tx/0xec8d87413c3e7dbfa17054e2275e19085facd48b9972763c23c4d76bdcdc3942 First Theft Transaction - Etherscan] (Accessed Jun 11, 2025)</ref>

<ref name="tornadocash1-20181">[https://etherscan.io/tx/0xfabd0f30f8aa7fbb10d37c2aab59bffb23c1a2c52f65b2bb70898a37dd3cc5d9 First TornadoCash Transaction - Etherscan] (Accessed Jun 11, 2025)</ref>

<ref name="suplansyitweet-20182">[https://twitter.com/SuplabsYi/status/1923038716966338703 SuplabsYi - "@ZunamiProtocol has been hacked again, though this time the approach was quite different. One could argue that bad actor are now favoring techniques that better conceal their tracks. After all, based on past incidents, it’s tough to pinpoint the true cause of *pk* compromises." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="opencovertwtter-20183">[https://twitter.com/OpenCover/status/1923293707819966569 OpenCover - "@ZunamiProtocol was hacked for $500k." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="tenarmoralerttweet-20184">[https://twitter.com/TenArmorAlert/status/1923027581269336575 TenArmorAlert - "TenArmor Security Alert #ZunamiProtocol has been hacked! Stay vigilant!" - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="0xdavidtweet-20185">[https://twitter.com/_0xdavid_/status/1923196203379896799 0xDavid - "Zunami gets hacked and the team first response on discord is "rekt" lmfao" - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="frogenomistweet-20186">[https://twitter.com/frog_e_nomics/status/1923007182318022691 Frog E-nomics - "Audits are worthless . Everyone of these auditors is offered market information ahead of time , they capitalize , and the outcomes are the same" - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="rdauditorstweet-20187">[https://twitter.com/rdauditors/status/1923064572266557549 RD Auditors - "This is the second time your protocol has been hacked. This time the hacker was granted the master key access to the protocol and withdrew $500k." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="tonykebottweet-20188">[https://twitter.com/tonykebot/status/1923029477820420316 Tony Kebot - "admin pk compromised or insider job? admin grants priviledged role to theft theft then 'withdraw stuck tokens'" - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="amlbothqtweet-20189">[https://twitter.com/AMLBotHQ/status/1923079257330258174 AMLBot - "@ZunamiProtocol disclosed a cyberattack that led to the theft of approximately $500k in collateral from its $zunUSD and $zunETH assets. The stolen funds were transferred to Tornado Cash, a platform known for enabling anonymous transactions." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="newmichwilltweet-20190">[https://twitter.com/newmichwill/status/1923007821722915165 Michael Egorov - "Tbf it was admin key compromise in Zunami. What is worse, admin key existed!" - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="peckshieldalerttweet-20191">[https://twitter.com/PeckShieldAlert/status/1923017858033799287 PeckShield - "#PeckShieldAlert #ZunamiProtocol reports being hacked, with collateral for zunUSD and zunETH stolen, resulting in a loss of ~$500K. The exploiter has transferred the stolen funds to #TornadoCash." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="web3watchdogtweet-20192">[https://twitter.com/web3_watchdog/status/1923018832655917137 Web3 Watchdog - "PeckShieldAlert: #PeckShieldAlert #ZunamiProtocol reports being hacked, with collateral for zunUSD and zunETH stolen, resulting in a loss of ~$500K. The exploiter has transferred the stolen funds to #TornadoCash." - Twitter/X] (Accessed Jun 11, 2025)</ref>

<ref name="zunamihomepage-20193">[https://www.zunami.io/ Zunami Protocol Homepage] (Accessed Jun 11, 2025)</ref>

<ref name="zunamirekt2-20210">[https://rekt.news/zunami-protocol-rekt2 Rekt - Zunami Protocol - Rekt II] (Accessed Jun 13, 2025)</ref>

<ref name="teletype-20240">[https://teletype.in/@processcases/0rwkY1W7gh9 Solved the Problem of Isolation, Bought a Ferrari, and Moved into a Penthouse - Teletype] (Accessed Jun 13, 2025)</ref>

<ref name="miogreendiscord-20241">[https://discord.com/channels/882212259626106890/882212332397297705/1381974448890052708 MioGreen - "Guys, I am deeply sorry for not being in contact with the community. It was very hard to receive the hack message again, so I spent some time with a specialist to get my psyche back to normal... I still don't have any other hypothesis except the cloning of my hard drive and investigating it at the airport border." - Discord] (Accessed Jun 13, 2025)</ref></references>

Zunami Protocol Compromised Admin All Collateral Drained - Revision history