Sonne Finance Exploited for $20 Million in Flash Loan Attack on Optimism Blockchain

May 15, 2024, 05:28 AM

Sonne Finance, a decentralized finance (DeFi) lending protocol on the Optimism blockchain, was exploited on May 14, 2024, resulting in a loss of approximately $20 million. The attack involved a known vulnerability in forks of Compound Finance, specifically a precision loss issue in CompoundV2 forks. The attacker utilized a 'donation attack' and a flash loan attack to manipulate certain markets offered by the platform, draining various tokens including USDC and WETH. The attacker borrowed VELO tokens through flash loans and exploited timelock contracts. In response, Sonne Finance has paused all its markets on Optimism to contain the breach. The incident marks the largest exploit recorded on the Optimism network to date.