Solana's protocol Raydium exploited, loses $2m

Raydium discovers a major exploit in its liquidity pool and loses at least $2 million, while users are urgently requesting withdrawals.

Raydium, the decentralized Solana-based protocol, announced on Dec. 16 that it was compromised. At the time of publication, an attacker attempted to steal around $2 million worth of cryptocurrency by withdrawing it from the pools.

Initially, the exploit was noticed by Prizm, a zero-fee swap aggregator on Solana. It urged users to perform withdrawals as soon as possible:

There seems to be a wallet is draining LP Pools from Raydium liquidity pools using admin wallet as a signer without having/burning LP tokens.

We withdrew protocol provided PRISM/USDC liquidity from Raydium

WITHDRAW YOUR PRISM/USDC LIQUIDITY FROM RAYDIUM

— PRISM (@prism_ag) December 16, 2022

Raydium later tweeted that the owner authority was likely overtaken by the attacker:

An exploit on Raydium is being investigated that affected liquidity pools. Details to follow as more is known

⁰Initial understanding is owner authority was overtaken by attacker, but authority has been halted on AMM & farm programs for now
Attacker accnthttps://t.co/ZnEgL1KSwz

— Raydium (@RaydiumProtocol) December 16, 2022

The exploit allegedly involved US Dollar Coin (USDC), Wrapped SOL (wSOL), Raydium, and other tokens. According to multi-chain portfolio Nansen, the hack involved at least $1.6 million worth of Solana.

In the past 24 hours, Raydium had facilitated deals of $4 million from a total locked trading pool of $45 million. It is unclear, however, if the improper withdrawals from the hacker are part of the $4 million total.

Solana suffers from FTX collapse

Additionally, the Solana DeFi ecosystem was hit particularly hard by FTX’s demise because of its close ties to the Sam Bankman-Fried trade and investment organization.

Sam Bankman-Fried, the creator of the FTX exchange and Alameda Research and a key investor in the Solana ecosystem, was crucial for Raydium, said Alpha Ray, the project’s inventor.