DeFi investors lose $15 million in Eminence flash loan exploit

Investors in a smart contract protocol created by renowned developer Andre Cronje, named Eminence Finance, have lost a total of $15 million after a flash loan bug was exploited by hackers.

The token was teased by Cronje on September 23 when he said the new system is “probably the most complex to date”.

A twitter profile for Eminence Finance was then created in the lead up to the exploit, with thousands of investors flocking to Uniswap to buy the token due to its potential connection with Cronje.

The hacker acted quickly, draining the entire $15 million that had been locked up in liquidity before converting it to the Dai stablecoin.

In a bizarre turn of events, the hacker returned $8 million to Yearn Finance, the protocol also created by Cronje.

The YFI developer then tweeted: “Yesterday we finished the concept behind our new economy for a gaming multiverse. Eminence. As per my usual methodology, I deployed our staging contracts on ETH so we can continue developing on it.

“These contracts, nor the ecosystem are final, yesterday alone you will notice I deployed two separate batches of the contracts, this is my usual ‘test in prod’ process. We started releasing some of the art teasers to showcase all the different clans in the game on twitter

“Around ~3AM I was messaged awake to find out a) almost 15m was deposited into the contracts b) the contracts were exploited for the full 15m and c) 8m was sent to my yearn: deployer account.

“The exploit itself was a very simple one, mint a lot of EMN at the tight curve, burn the EMN for one of the other currencies, sell the currency for EMN.”

Despite reaching a high of $0.02 per token, EMN is now effectively dead on Uniswap with liquidity sliding all the way back down to $29,000.

One saving grace of the whole ordeal is that Cronje has revealed he will refund the $8 million, slightly more than half of the hacked funds, to those who were holding EMN before the exploit surfaced.

It is currently unknown what the hacker has done or will do with the remaining $7 million that was swiped from the smart contracts.

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