PeckShield reported through a tweet about the new hack on Cream Finance. The blockchain security firm said a flash credit attack on the decentralized financial credit and borrowing log.

#FlashLoanAlert https://t.co/JPW7e368qd

– PeckShield Inc. (@peckshield) August 30, 2021

PeckShield stated that the hacking was done via a 500 Ethereum Flash loan from the attacker. This was used to inject a re-entry bug into the Flex Network’s smart contract. Typically, undercollateralised flash loans can be taken out and paid back in a single transaction.

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As a DeFi protocol for lending, Cream Finance enables users to earn interest on their deposited assets. Although Cream Finance is a branch of the Compound Protocol, how it works is very different from Compound or Aave. The platform has several other markets for some esoteric digital assets.

1/4 @CreamFinance was exploited (a hack tx: https://t.co/JPW7e368qd) resulting in a profit of ~ $ 18.8 million for the hacker.

– PeckShield Inc. (@peckshield) August 30, 2021

This attack on Cream Finance involved exploitation with 1,308 Ethereum and over 418 million AMP, Flexa Network’s native token. According to PechShield, the Ethereum records show that over $ 6 million was hacked at 5:44 UTC.

Cream Finance turns into yet another DeFi protocol to be hacked in 2021

In addition, Cream Finance team members confirmed the authenticity of the hacking reporting. Then the members reported on Discord Channel, the project’s official channel, and started working with PeckShield.

The team announced that the CREAM v1 market hacking took place on the Ethereum blockchain. In addition, they mentioned that this will be done by re-entering the contract on the AMP token.

At the time of writing, AMP’s value has dropped 15% to $ 0.05 in a matter of hours. Cream Finance’s native token, CREAM, also fell about 6% in value.

However, ETH is at $ 3,190.46 which shows a slight decrease over the past 24 hours. The total amount of Crean Finance hacking is more than $ 25 million. The hackers’ address shows they currently own about $ 18.8 million.

Amid the hack, Cream Finance is down 6% | Source: CREAMUSD on TradingView.com

The Cream Finance team stopped any further loss. The team said they are now taking a break from supplying and borrowing AMP. It also admitted that the hack will not affect any other market. Eason Wu, the protocol’s production manager, posted this information on Discord.

Remember that earlier in the year; Cream Finance had a huge hack. The attack resulted in the loss of $ 37.5 million worth of digital assets. According to the report, the previous hacking was a major culprit in Alpha Finance’s exploitation.

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Lightning loans remain one of the controversial features of decentralized finance. This is because the loans do not require any collateral and therefore they are prone to hacking. This explains the recent flash credit attacks and hacks.

A similar incident is a hack on the Bilaxy crypto exchange on August 28th. The exchange had a huge hot wallet hack that compromised around 295 ERC-20 tokens. In addition, a hack on Liquid on August 19 resulted in a loss of approximately $ 100 million.

Featured image from Pixabay, chart from TradingView.com

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