A flash loan attack causes $BUNNY to lose 95% of its value.
PancakeBunny is the latest victim of a flash loan attack. A hacker manipulated the $BUNNY market through PancakeSwap and pushed the price of the token down to almost zero.
Flash loan is a financial leverage used by many traders. Flash loans do not require collateral; you’ll pay a portion of the interest included with the original loan at the end of the transaction instead. The group of hackers used flash loans to manipulate market prices and benefit from arbitrage.
More specifically, the attacker used PancakeSwap to borrow a huge amount in $BNB, then manipulated the value of the USDT/BNB and BUNNY/BNB pairs. Data from CoinGecko shows that the $BUNNY acquired was subsequently dumped in the market, causing the price of $BUNNY to drop from $146 to $6.17 (-95%).
The attacker withdrew 697,000 $BUNNY and 114,000 $BNB from the BUNNY/BNB pool, thus made a profit of about $200 million. The loan to carry out this mission has also been repaid to PancakeSwap.
This is the latest attack against decentralized finance (DeFi) protocols on Binance Smart Chain. $BUNNY’s TVL was $1 billion prior to this event.