Raydium, one of the prominent decentralized exchanges (DEXes) operating on the Solana blockchain, has fallen victim to an exploitation, resulting in losses exceeding $2 million.
The protocol announced the security breach on an early Friday, revealing that an attacker successfully seized control of the organization’s “owner authority.” This unauthorized access allowed the attacker to tap into Raydium’s liquidity pools and drain them.
In decentralized finance (DeFi), a liquidity pool refers to a compilation of user funds locked in a smart contract, pooled together to facilitate trading on a DEX. These pools play a crucial role in maintaining liquidity on a network, rewarding users who contribute assets to the pool.
According to insights from crypto research company Nansen, the wallet controlled by the attacker has received tokens totaling over $2.2 million, with $1.6 million in SOL, the native token of the Solana blockchain, being among the pilfered assets.
Prism, another decentralized exchange (DEX) based on Solana, has reported that an unauthorized user gained access to the admin wallet and is siphoning assets from Raydium liquidity pools. Prism urged users to withdraw their PRISM/USDC liquidity from Raydium, stating that they had already done so. The protocol revealed:
“There seems to be a wallet that is draining LP Pools from Raydium liquidity pools using the admin wallet as a signer without having/burning LP tokens. We withdrew protocol provided PRISM/USDC liquidity from Raydium. WITHDRAW YOUR PRISM/USDC LIQUIDITY FROM RAYDIUM.”
Raydium, being one of Solana’s significant decentralized finance (DeFi) protocols, is considered a cornerstone of the Solana DeFi ecosystem. Presently, there is over $31.7 million worth of assets locked on the Raydium protocol, according to DeFiLlama data. The DEX reached an all-time high of over $2.2 billion in Total Value Locked (TVL) in mid-November 2021.
In the aftermath of the exploit, Raydium’s native token, RAY, experienced a decline, losing over 10% in a matter of minutes. The token is currently trading at $0.153385, down by 12% over the past 24 hours. Meanwhile, SOL, the native token of the Solana blockchain, has lost around 8% over the same period.
The Solana DeFi ecosystem faced challenges following the collapse of the FTX exchange due to its close ties to the Sam Bankman-Fried trading and investment empire. Additionally, after the FTX exchange hack in mid-November, it was revealed that the private keys to the Solana decentralized exchange and liquidity provider Serum were housed on the exchange. Consequently, developers of the Serum project announced efforts to fork Serum’s code as many projects rushed to sever ties with Serum.