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On April 12th, users of the lending app Pac Finance on Blast claimed to have suffered a $24 million liquidation due to a sudden change in parameters in the developer's wallet on April 11th.
Pac Finance allows cryptocurrency holders to deposit funds and earn interest through lending capital, ensuring repayment by only allowing borrowers to lend a certain percentage of the collateral's value. This percentage is called the Loan-to-Value Ratio (LTV). According to blockchain data from the Blast network, the Pac Finance developer's wallet called a function on its PoolConfigurator-Proxy contract at 1:06 AM UTC on April 11th, setting the LTV for ezETH to 60%.
While the LTV can be changed by the development team, it is typically only implemented after an announcement. However, this parameter change was not announced through official channels by Pac Finance, leading to the liquidation of platform users.
Following the liquidation event, Pac Finance team members clarified in the community that there was indeed an announcement, but it was made when responding to others rather than through an official announcement. They stated that the team had previously informed the engineer responsible for the contract to modify the LTV, but the engineer made unauthorized changes to the liquidity threshold without communicating with the team, resulting in this issue. "We are investigating with several security audit experts such as pacman and zachxbt, and contacting the affected users."
Pac Finance is the first hybrid lending protocol on Blast, with both peer-to-peer lending and pool lending functionalities. Previously, it became a popular interactive protocol due to expectations of airdrops. After this unwarranted liquidation event, the community also recalled the drama surrounding the previous projects of the founding team.
In May last year, the NFT lending protocol ParaSpace witnessed internal conflicts, with several KOLs warning of internal conflicts within the ParaSpace team and advising users to withdraw funds as soon as possible. This incident quickly spread within the community, leading to panic among users who withdrew funds from ParaSpace at high gas fees. During this turmoil, the "project control" and "team trust" of the ParaSpace founding team were questioned to some extent, although they later ensured the safety of user funds, they suffered significant impact in terms of market sentiment. Subsequently, ParaSpace announced a merger and rebranding with Parallel Finance to create ParaX.
Returning to the Pac Finance incident, it is not the first project on Blast to encounter issues with fund security. As a Layer2 platform that emerged at the end of last year, Blast has generated many early native projects under the rendering of airdrop expectations and explosive TVL growth, but at the same time, it has also encountered many problems.
In early March, Blast lending protocol Orbit Lending was also accused by KOLs of having issues with the liquidation threshold. The protocol stated an 83% liquidation threshold, but it would actually be liquidated at 80%. However, the project later compensated affected users.
During the same period, the Blast ecosystem project Munchables claimed to have been attacked, with issues suspected in the locked contract, resulting in the theft of 17,400 ETH (worth approximately $62.3 million). SomaXBT disclosed that Munchables had previously hired an unknown security team called EntersoftTeam to issue an audit report in order to save audit fees. The team's account description claimed to be "an award-winning application security company with certified ethical hackers", but the platform had only a few hundred followers. |
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Post time 20-4-2024 16:34:28
