Float Protocol Rari Capital Weak Oracle
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Float Protocol's liquidity pool had limited liquidity, and was used by Rari Fuse to determine the eligibility to borrow assets. An attacker manipulated the price through a large purchase, then took out a loan using the inflated value, profiting $250k+ after all was said and done. It appears that the funds were ultimately returned.
This is a global/international case not involving a specific country.[1][2][3][4][5][6][7]
About Rari Capital
"Float Protocol, DeFi Money. Decentralised Finance needs stability, but we can do better than the dollar.
FLOAT tracks a basket of digital assets instead of trying to exactly match the price of a dollar. It is designed to change value over time corresponding to your digital purchasing power."
"Float Protocol Pool 90 on @RariCapital pool suffered effects from a lack of liquidity in the Uniswap V3 FLOAT/USDC oracle which lead to severe price manipulation."
"Our @RariCapital pool just experienced effects from a weak oracle. We're looking into the issue and will update with more information shortly."
"The attacker brought in >47 ETH via Tornado Cash and deployed an orchestrating contract."
"Via the contract they swapped 47 ETH -> 129,447 USDC -> 77.5k FLOAT; this brought the vast majority of FLOAT out of the pool dramatically increasing the price within the FLOAT/USDC pool."
"The attacker waited for 2-7 minutes for the time weighted oracles to shift the price."
"At this point they were then able to deposit FLOAT into Rari Fuse at a vastly increased rate and borrow other assets, before selling the FLOAT back into the Uniswap V3 pool to return the price."
"The orchestrating contract still contains 250k USDC and 5 fFLOAT."
"Lack of liquidity in the Uniswap V3 FLOAT/USDC oracle allowed an attacker to manipulate the prices within the pool, then deposit it at a much higher rate. The hacker pulled about 350 ETH (equivalent to $1.1 million) out of the pool, though according to PeckShield they later returned around $250,000 for some reason."
"The depositors primarily impacted were Float Protocol's treasury diversification funds, FRAX AMO, and FEI PCV deposits."
"As such we currently calculate there was 1 depositor of $25k DAI in user funds lost at this time, but are still collecting further information for a follow up proposal."
This is a global/international case not involving a specific country.
The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.
Include:
- Known history of when and how the service was started.
- What problems does the company or service claim to solve?
- What marketing materials were used by the firm or business?
- Audits performed, and excerpts that may have been included.
- Business registration documents shown (fake or legitimate).
- How were people recruited to participate?
- Public warnings and announcements prior to the event.
Don't Include:
- Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
- Anything that wasn't reasonably knowable at the time of the event.
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The Reality
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- 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
The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.
| Date | Event | Description |
|---|---|---|
| January 14th, 2022 2:28:52 PM MST | Swap Completed | The attacker completes their swap to manipulate the price and extract a profit. |
| January 14th, 2022 3:13:00 PM MST | Tweet Sent Out | Float Protocol sends out a tweet to notify users that their "pool just experienced effects from a weak oracle". |
| January 14th, 2022 7:53:00 PM MST | Follow On Post | A follow up post-morten is posted by the Float Protocol team. |
Technical Details
This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?
Total Amount Lost
The total amount lost has been estimated at $250,000 USD.
How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?
Immediate Reactions
How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?
Ultimate Outcome
What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?
Total Amount Recovered
The total amount recovered has been estimated at $250,000 USD.
What funds were recovered? What funds were reimbursed for those affected users?
Ongoing Developments
What parts of this case are still remaining to be concluded?
Individual Prevention Policies
No specific policies for individual prevention have yet been identified in this case.
For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.
Platform Prevention Policies
Policies for platforms to take to prevent this situation have not yet been selected in this case.
For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.
Regulatory Prevention Policies
No specific regulatory policies have yet been identified in this case.
For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.
References
- ↑ @ErgoBTC Twitter (Mar 15, 2023)
- ↑ An attacker pulls about 350 ETH from Float Protocol's Rari Capital pool (Jan 30, 2024)
- ↑ @FloatProtocol Twitter (Jan 30, 2024)
- ↑ @peckshield Twitter (Jan 30, 2024)
- ↑ Snapshot (Jan 30, 2024)
- ↑ https://etherscan.io/tx/0x40db7bd89d2a3f7df2793ba4f5be9a2ca93463d6bb6af024e5cd1b73ff827248 (Jan 30, 2024)
- ↑ Float Protocol (Jan 30, 2024)