Nirvana Finance - REKT

Nirvana Finance lost $3.5M yesterday to a flash loan attack.

Is this “DeFi 3.0”?

The recently-launched, Solana-based protocol claims that it “transforms risk into reward” whilst boasting a “known maximum downside and unlimited upside.

Who knew that the maximum downside could be almost -90%...

The team eventually announced the loss, hours after the news had been broken by the SolanaFM team. However, a post mortem is yet to be published.

As in the case of Crema Finance, the exploiter made use of flash loans from Solend, the lending protocol which found itself in a governance crisis last month.

The Nirvana team has made an appeal to the hacker to return the funds.

But will the hacker choose the path of enlightenment?

Credit: 0xFA2, OtterSec

The attacker took a $10M flash loan from Solend, which was then used to mint ANA, inflating the price of ANA from ~$8 to ~$24.

The overpriced ANA was then used to cashed out USDT via Nirvana’s treasury, netting the exploiter ~$3.5M in profit, on top of the flash loaned amount.

The stolen funds were then bridged via Wormhole to the attacker’s ETH address, where they remain at the time of writing.

Attacker’s address: 76w4SBe2of2wWUsx2FjkkwD29rRznfvEkBa1upSbTAWH

Attack tx: LyUnvdY9…

Nirvana’s Treasury contract: CxuuSEv67PzNkMxqCvHeDUr6HKaadoz8NhTfxbQSJnaG

Following last year’s SBF-pumped success of Solana summer, ever since the Wormhole hack, it seems that Solana’s relevance has been waning.

As VCs move on to the latest retail-bait L1 promising fast transactions and endless scalability, will projects like these prove to be the last cash-grabs of an ecosystem past its prime?

Nirvana’s docs read like a glossary of DeFi buzzwords and statements like “ANA protects its holders against catastrophic stablecoin depegging” and “The ANA token cannot go to zero

The charts beg to differ.

“Superstable” NIRV:

“Reserve-backed” ANA:

From the hyperbole to the “automatic audit” completed earlier this month, this protocol doesn’t seem built to last…

A user on Solana Forums may have put it best with the following comment:

The team seem to have made peace with the fate of their tokens, only time will tell if they’ll get a chance at reincarnation.

Oh well...


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