DeFi protocol UwU Lend falls victim to $19.3M exploit

UwU Lend, a DeFi protocol founded by Quadriga CX co-founder Michael “Sifu” Patryn, has fallen victim to an exploit resulting in the loss of $19.3 million, according to reports from blockchain security firms, with address confirmations disclosed by Arkham Intelligence.

The incident comes amidst a turbulent period for Patryn, who previously faced controversy when Quadriga CX collapsed, and an address linked to him transferred $5.5 million worth of ether (ETH) to Tornado Cash in 2022.

Onchain data compiled by Arkham reveals that a single wallet managed to siphon a collection of tokens, including wrapped ether (WETH), wrapped bitcoin (WBTC), and stablecoins, before trading the majority of the stolen funds on the decentralized exchange Uniswap. The exact method used to carry out the exploit remains unclear at this time.

UwU Lend integrates lending markets, investment strategies, and asset management vaults. It allows users to lend and borrow digital assets, participate in investment strategies, and manage their assets through non-custodial means. According to documentation on its website, the platform prioritizes security, utilizing code forked from AAVE V2 and undergoing audits to minimize smart contract risks. However, this recent breach has exposed vulnerabilities in the protocol’s security measures.

Prior to the exploit’s disclosure, UwU Lend offered its users high-yield opportunities and robust asset management features. The protocol generates revenue by distributing fees to users, primarily benefiting liquidity providers (LP stakers), with a portion allocated for xUwU staking system buybacks.

The protocol has yet to provide an official statement regarding the incident.