Arcadia Finance, a DeFi protocol on the Base blockchain, was exploited for $3.5 million due to a vulnerability in SwapData. This was reported by the Cyvers security firm.
Arcadia Finance Loses $3.5 Million to Vulnerability
Arcadia Finance faced a major breach when a vulnerability in **SwapData** was exploited, leading to the theft of approximately **$3.5 million**. The incident was first reported by **Cyvers**, a blockchain security firm. Entities involved include **Arcadia Finance** and **Hacken**, which confirmed the vulnerability linked to the **Rebalancer contract**. This exploit occurred on the **Base blockchain**, backed by Coinbase.
Funds Converted to ETH Amid Security Concerns
The breach affected several tokens including **USDC, USDS, and WETH**, causing concern over DeFi security. Funds were quickly converted to **ETH** and shifted to the main Ethereum network. Though the Base blockchain recently introduced a bug bounty, institutional reimbursements or funding responses tied directly to this breach remain unreported by official channels.
Experts Highlight Repeated Risks in the DeFi Space
Similar smart contract exploits have been prevalent in the DeFi space, with unchecked parameter manipulation repeatedly posing risks. Historically, such breaches have led to substantial financial losses worldwide. Security advisories from **Cyvers** and **Hacken** emphasize the **critical need for proper validation** in smart contracts to mitigate future vulnerabilities and safeguard digital assets.
The Arcadia Finance incident illustrates the growing need for enhanced security standards and regular audits of smart contracts to minimize risks in DeFi sectors.
