Curve Finance TVL falls over $1B following Vyper vulnerability exploit

The total value of assets locked on decentralized finance protocol Curve Finance (CRV) plunged nearly 50% in the last 24 hours to $1.731 billion from $3.26 billion recorded on July 30, according to DeFiLlama data.

The exodus can be attributed to an exploit of the protocol, which increased fears of liquidation and bad debt among community members who immediately withdrew their assets from the crypto project.

Vyper vulnerability affects Curve Finance

On July 30, a malfunctioning ‘reentrancy locks vulnerability’ was found on multiple versions of Vyper, a smart contract language for the Ethereum (ETH) virtual machine (EVM). The programming language confirmed the incident, revealing that crypto projects running Vyper 0.2.15, 0.2.16, and 0.3.0 could be impacted.

Following the news, Curve Finance stated that some of its stable pools running Vyper 0.2.15 had exploited the malfunctioning reentrancy lock vulnerability.

A reentrancy attack allows an attacker to drain funds of a vulnerable contract by repeatedly calling the withdraw function before it updates its balance. This attack has been commonly used to exploit several DeFi protocols.

BlockSec, a blockchain security firm, said the reentrancy attack could potentially risk all pools with wrapped Ether (WETH).

While it was unclear how much was stolen from Curve Finance’s stablecoin pools, some estimates suggest that as much as $70 million might have been stolen.

However, a MetaMask developer, Taylor Monahan, noted “lots of whitehat activity + automated MEV bots,” meaning the amount might be lesser.

CRV’s price tank

The exploit has made Curve’s CRV token highly volatile, with its price dumping by around 15% to $0.64707 at the time of writing, according to CryptoSlate’s data.

Meanwhile, CRV’s on-chain value hit lows of $0.109 as liquidity tapered off after the CRV/ETH pool was attacked.

South Korean crypto exchange Upbit suspended deposits and withdrawals for the token, citing vulnerabilities…