"Protocol was exploited and deposits have been drained," the project's Twitter account said on Dec. 10 at 4:14 p.m. ET, while also declaring that it "set all interest rates to zero so that supply and borrow balances are not moving while we weigh recovery options."
Protocol was exploited and deposits have been drained. We have set all interest rates to 0 so that supply and borrow balances are not moving while we weigh recovery options. What we know right now:
— Lodestar Finance (đź’™,🧡) (@LodestarFinance) December 10, 2022
The exploiter was able to successfully manipulate the exchange rate of the plvGLP token to 1.83 GLP per plvGLP — making it 83% more valuable than it should have been. Using the inflated tokens as collateral, the exploiter could then remove all available liquidity on Lodestar Finance through bad debt.
The profits were bridged to Ethereum.
Other holders of plvGLP were able to use the exploiter's actions to their advantage by cashing out 1.83 GLP per plvGLP, Lodestar Finance noted.
According to the lending platform, 2.8 million GLP — worth $2.4 million at the time — can be recovered. It is also attempting to negotiate with the exploiter.
