Decentralized crypto lending platform Abracadabra.cash used to be hit by an exploit on Tuesday, ensuing in a $6.5 million loss to the protocol.

The exploit used to be flagged by blockchain security agency PeckShield, which infamous that the attacker funded the exploit with 1 ETH from Twister Money.

Magic Web Money (MIM), the stablecoin tied to the protocol flash crashed to $0.76 after the exploit. At the time of writing, the stablecoin used to be soundless procuring and selling below its U.S. buck-peg at spherical $0.98.

The attacker managed to trick definite Abracadabra’s isolated lending pools on Ethereum, known as “cauldrons,” and long-established a nested series of clear contracts to loop the Abracadabra Degenbox’s “borrow” and “repay” functions, essentially based mostly on diagnosis from Arkham.

Meanwhile blockchain security agency CertiK infamous on X that early indications pointed to a “rounding error” being the foundation motive at the succor of the exploit.

The MIM group acknowledged the exploit and mentioned the protocol’s decentralized self sustaining organization (DAO) used to be attempting to stabilize the rate of the stablecoin of MIM through a buyback and burn program, most likely explaining why MIM is now procuring and selling closer to its peg.

Around 10 hours later, on the opposite hand, the group issued an update urging users to revoke all approvals to the clear contract to prevent a lack of funds.

MIM has misplaced its peg sooner than, fluctuating to a low of $0.95 after the collapse of FTX in November 2022, provided that FTX’s native token FTT used to be the very top collateral token backing the stablecoin. MIM also destabilized after the collapse of the Terra ecosystem earlier that year.