Raft hack — November 2023

On 10 November 2023 at 18:59:23 UTC an attacker exploited a precision error in Raft, an Ethereum protocol that issued the R stablecoin against staked-ETH collateral, and minted R that was not backed by any deposit.

Raft's post-mortem sets out the sequence. The attacker flash-borrowed 6,000 cbETH from Aave and transferred 6,001 cbETH into the InterestRatePositionManager to inflate the collateral index, then used a round-up path to mint 1 wei of share tokens for 1 wei of cbETH. Repeating that sixty times produced sixty wei of shares credited as 10,050 cbETH, and the attacker redeemed 6,003 cbETH against 90 wei of rcbETH-c. About $6.7 million of unbacked R was created and sold into the R liquidity pools: 2.1 million R for 2 million sDAI and 1.2 million R for DAI on Balancer, and 200,000 R for 86,000 USDC on Uniswap. CoinDesk reported that R fell as much as 50 percent below its peg before recovering to around 70 cents.

The loss figure is contested. Raft's own accounting says the minted R was swapped for 1,575 ETH worth $3.6 million; CoinDesk reported roughly $3.3 million. The attacker then sent 1,570 ETH to a burn address, destroying almost all of the proceeds, and by CoinDesk's reckoning finished with 14 ETH against the 18 ETH they had drawn from Tornado Cash to fund the attack, a net loss.

Raft had been audited by Trail of Bits and Hats Finance, neither of which caught the flaw. Raft suspended minting. Its post-mortem promised a recovery plan but did not contain one; ChainCatcher subsequently reported the distribution of 3,963,192.62 DAI from Raft's Peg Stability Module to R holders recorded at block 18,572,928, with claims open until 31 March 2024.