Zunami Protocol, a yield aggregation protocol for stablecoin staking, confirmed a hack on its liquidity pool on Curve Finance.

The protocol promised a yield of spherical 14% on stablecoins, boasting the “very best APY in the marketplace” with $5 million in Entire Price Locked, in step with its web online page.

Blockchain security company PeckShield chanced on that $2.1 million changed into lost in the exploit, which changed into caused by a worth manipulation teach that allowed the attacker to take a flash loan from the balancer and add liquidity to greatly commerce the price on Zunami.

PeckShield moreover chanced on that the stolen funds had been despatched to Twister Cash, which implies the exploiter is seemingly on the scoot to cashing out his or her proceeds from the assault.

Following the exploit, the price of the Zunami USD stablecoin (UZD) and Zunami Ether (zETH) plummeted sharply. UZD lost its peg to the U.S. dollar and dropped ninety nine% to shut to $0, while zETH fell by 89% to a low of $206.

The Zunami stablecoin’s depeg comes no topic the protocol’s claims that it would be resilient to this form of mission in the threat assessment documentation on its web online page.

“The protocol makes exercise of a current overcollateralization mechanism, the set aside RSR stakers are the first loss capital in the case of failing collateral. The mechanism changed into battle examined for the duration of the bustle on Silicon Valley Financial institution on March 9th,” study Zunami’s documentation.