Pac Finance, a crypto lending protocol built on the Blast network, all without extend modified the loan-to-rate (LTV) ratio and liquidation parameters, leading to cascading liquidations in a matter of six seconds.

The incident was flagged on X by Will Sheehan, founding father of blockchain knowledge agency Parsec, who shared knowledge on the $26 million liquidations of liquid staking token ezETH, noting that one person in suppose lost close to $24 million.

Primarily primarily based entirely on analysis from EigenLabs developer “0xkydo,” an externally owned cope with (EOA) pockets, presumably controlled by Pac Finance, updated the liquidation threshold without any prior warning and did not encompass a timelock.

“Designing a lending protocol that lets in an EOA to arbitrarily alter the liquidation threshold with out a timelock isn’t correct downhearted construct; it’s irresponsible,” stated 0xkydo.

The Pac Finance crew responded to Sheehan, announcing they were responsive to the anguish and were in contact with the impacted users to realize a concept to mitigate it.

“In our effort to adjust the LTV, we tasked a perfect contract engineer to make the specified changes.However, it was found that the liquidation threshold was altered all without extend without prior notification to our crew, leading to the sleek anguish,” they stated.

The crew stated that going forward, they’d put into effect a governance contract or timelock and dialogue board for future upgrades to make obvious that discussions are planned sooner than time.