• zkSync Era protocol EraLend was exploited, and the hacker reportedly made multiple transactions in USDC.
  • The lending protocol has since suspended all borrowing operations and is also advising users against depositing USDC.
  • zkSync Era, which launched this March, peaked in terms of performance earlier this month but has lost more than $300 million in total value locked in the last 20 days.

Crypto crimes came down significantly over the past six months but did not come to a stop, and the latest victim is Eralend’s zkSync Era. Lending protocol EraLend, based on the Ethereum layer-2, was exploited on Tuesday, leading to losses worth millions of Dollars.

Read more - ISIS-affiliated groups raise $2 million in Tron-based USDT: TRM Labs report

zkSync Era protocol exploited 

zkSync Era-based lending protocol EraLend fell victim to an exploit on July 25 after hackers managed to steal over $3.4 million in USDC (USD Coin). While the root cause of the exploit is yet to be identified, the development team of the protocol confirmed the hack stating,

"We've experienced a security incident on our platform today. The threat has been contained. We've suspended all borrowing operations for now and advise against depositing USDC. We're working with partners and cybersecurity firms to address this.

Since the details regarding the exploit are yet to be revealed, the exact method of the hack remains unknown. However, according to Twitter user Spreek, multiple transactions took place in which the USDC was moved to the exploiter's address.

Upon confirming the hack, the lending protocol team reassured users that the only token to be affected was the stablecoin USDC and that ETH (Ethereum) and LP tokens were completely safe. EraLend did not immediately respond to FXStreet's request for comment.

This exploit marked the first major hack experienced by the Ethereum layer-2 solution since its launch in March. zkSync Era noted sudden bullishness towards the end of June and peaked in terms of the performance of protocols at the beginning of this month. The total value locked (TVL) on the chain exceeded $735 million.

zkSync Era TVL

zkSync Era TVL

This was short-lived, however, as soon after the protocol began losing investors' funds, and in the last 20 days, the L2 lost over 40% of its TVL, amounting to almost $300 million. At the time of writing, the Ethereum layer-2 chain has about $446 million locked on it. 

On the contrary, performance does not seem to have been impacted and has noted improvements even, with the activity rising over the past month. The layer-2 has been conducting just as many transactions per second (TPS) as the Ethereum mainnet averaging 11-12 TPS.


Like this article? Help us with some feedback by answering this survey:



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Is Altcoin Season here as Bitcoin reaches a new all-time high?

Bitcoin reaches a new all-time high of $98,384 on Thursday, with altcoins following the suit. Reports highlight that the recent surge in altcoins was fueled by the victory of crypto-friendly candidate Donal Trump in the US presidential election.

More Altcoin News
Shanghai court confirms legal recognition of crypto ownership

Shanghai court confirms legal recognition of crypto ownership

A Shanghai court has confirmed that owning digital assets, including Bitcoin, is legal under Chinese law. Judge Sun Jie of the Shanghai Songjiang People’s Court shared this opinion through the WeChat account of the Shanghai High People’s Court.

More Cryptocurrencies News
BTC hits an all-time high above $97,850, inches away from the $100K mark

BTC hits an all-time high above $97,850, inches away from the $100K mark

Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: New high of $100K or correction to $78K?

Bitcoin: New high of $100K or correction to $78K?

Bitcoin surged to a new all-time high of $93,265 in the first half of the week, followed by a slight decline in the latter half. Reports highlight that Bitcoin’s current level is still not overvalued and could target levels above $100,000 in the coming weeks.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP