Introduction

Ethereum’s Prisma Finance announced that it had been exploited, resulting in an unknown amount of funds being taken from the platform's vaults. The emergency multisig paused the Prisma Protocol to ensure the safety of remaining funds, confirming that stablecoins mkUSD and ULTRA are not in danger as they are overcollateralized.

Since the exploit, the mkUSD stablecoin has fallen below its $1 peg, currently trading at $0.98968, while the PRISMA token's value dropped by over 25% to $0.24, but has recovered slightly to $0.3024. This news caused a 40% decrease in total assets locked on the platform, dropping from $236 million to $143 million.

Reports from blockchain security firms indicate that the exploit was due to a flash loan attack resulting in the theft of $11.6 million in digital assets. Despite initial estimates of $9 million in losses, Prisma Finance's delay in pausing its contract allowed the attacker to steal an additional $1 million. Prisma is currently investigating the incident and has advised vault owners to disable delegate approval on LST and LRTs.

Following the exploit, there has been an increase in phishing attempts by malicious actors trying to take advantage of the situation. One impersonator claimed wallets connected to Prisma were at risk, encouraging users to connect their wallets and use a malicious exploit checker. Prisma warned users to only trust official communication channels and to be cautious of phishing links during this period.