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Prisma Finance hit by hacker attack, over $11.6 million lost



Prisma Finance fell victim to a devastating hacker attack resulting in a loss of approximately 3,257.7 ETH, valued at $11.6 million. The protocol’s official team has taken action by pausing operations to conduct a thorough investigation into the breach. 

“We are aware of a possible exploit on Prisma,” it said. “Core engineering contributors will pause the protocol and investigate and we’ll share an update and a post-mortem.”

With user funds at risk, Prisma Finance advises all users to revoke any connections to the platform to prevent further losses. 

The platform warns that all users who have linked their wallets are susceptible to potential future exploits and urges immediate action to mitigate risks.

Prisma Finance is a DeFi protocol that focuses on maximizing the potential of Ethereum’s liquid staking tokens (LSTs) by introducing a stablecoin called acUSD, which is over-collateralized by these tokens. 

Users can deposit LSTs like wstETH, cbETH, rETH, sfrxETH, and wbETH to mint acUSD, allowing them to leverage their Ethereum staking rewards while holding a stablecoin position. 

Prisma stands out by offering flexibility and governance control through its native token, PRISMA, which enables users to participate in protocol governance, adjust fees, and emissions, and incentivize liquidity providers. 

The protocol also incentivizes liquidity through the distribution of PRISMA alongside CRV/CVX in Curve liquidity pools.

Prisma Finance has yet to disclose specific details regarding the nature of the exploit or the extent of the security breach.

Prisma made its official debut on the Ethereum network in September 2023, garnering significant backing from industry leaders such as Curve, Convex, LlamaNodes, and LayerZero. 

Alongside its launch, Prisma implemented a novel governance framework, enabling users to engage actively in decision-making processes by staking PRISMA tokens to influence protocol parameters and fee structures.

Additionally, Prisma Finance supported various liquidity collateral options on the Ethereum network to mint the stablecoin mkUSD with over-collateralization, offering users the opportunity to earn through Ethereum staking rewards.

Read also; Fidelity seeks approval for Ethereum ETF with staking

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