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The DeFi protocol Prisma Finance, known for issuing stablecoins backed by Ethereum liquid stake and re-stake tokens (LRTs), was the target of a hacker attack that resulted in the theft of almost US$12 million in assets.

The person who initially identified the suspicious activity was the blockchain-focused security company Cyvers. The organization detected the transfer of 3,258 ETH to the attackers before the development team could pause the protocol.

After identifying the attack, the team urged Prisma protocol users to revoke permissions granted to affected smart contracts. Subsequently, the person responsible for the hacker attack distributed the stolen assets to three different Ethereum addresses, according to an analysis carried out by the security company Peckshield.

Hacker attack on Prisma Finance

After the incident, the protocol’s native token, PRISMA, suffered a 30% drop, according to data from CoinGecko, to US$0.24. However, the price of the crypto asset has managed to partially recover since then.

The token is currently trading at $0.31 with a market cap of $9.7 million. In the last 24 hours, the price of the digital asset fell by around 17%.

The hacker attack on the DeFi protocol also resulted in the withdrawal of approximately US$110 million from the protocol, leaving it with a total value locked (TVL) of US$127 million, according to data from the DeFi platform Llama.

Prisma issues two stablecoins, mkUSD and ULTRA, both pegged to the dollar and backed by liquid stake tokens (LSTs) and re-staking tokens (LRTs) from the Ethereum network, respectively. mkUSD, the protocol’s flagship, has a market value of US$35 million. Meanwhile, the more recent ULTRA is valued at just over US$2 million.

Prisma’s design was inspired by the Liquity protocol’s LUSD issuer, which confirmed to X that it is not vulnerable to the same type of attack.

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