Euler Finance flash-loan attacked for an estimated $197 million

Lending protocol Euler Finance was hit by a flash-loan attack, resulting in a loss of $197 million, according to security firms BlockSec and PeckShield.

The attack occurred at 4:50 am ET, allowing the perpetrator to borrow large amounts of funds and drain them from the protocol. They drained $136 million of staked ether (stETH), $34 million of USDC, $19 million of wrapped bitcoin (WBTC) and $8.7 million of DAI, BlockSec noted in a document.

Euler Labs, the developer of the protocol, said it was working with security professionals and law enforcement and will release more information later.

Flash loans are a popular tool for attackers looking to exploit vulnerabilities in DeFi protocols, as they allow borrowers to access large amounts of funds without providing collateral. However, they come with a high level of risk since the borrower must repay the loan within a short time frame.

Euler is a non-custodial protocol that allows users to lend and borrow crypto assets and is run by a decentralized autonomous organization (DAO). It raised a $32 million fundraising round led by Haun Ventures in June 2022.

The attack caused the price of the Euler (EUL) token to drop more than 45% — coming down to $3.30 from $6.10.