Rari Capital hack — May 2021

Rari Capital's Ethereum Pool was drained on 8 May 2021. Rari's own post-mortem says an attacker took approximately 2,600 ETH, around $10 million, amounting to 60% of all user funds in that pool. CoinDesk valued the same 2,600 ETH at about $10.6 million and Halborn's analysis at roughly $11 million; the spread comes from which ETH price is applied, not from any dispute over the quantity of ETH.

The pool allocated part of its ETH to Alpha Homora's interest-bearing ibETH token, and derived the ibETH/ETH rate itself by dividing ibETH.totalETH() by ibETH.totalSupply(). Alpha Homora's work() function permitted a caller to execute arbitrary contract calls inside it. Using 59,000 ETH flash-borrowed from dYdX, the attacker first deposited into the Rari pool at the ordinary rate to mint pool shares, then called work() with encoded data so that a fake token contract's malicious safeApprove() pushed 2,000 ETH into the ibETH Bank contract, temporarily inflating totalETH(). Re-entering Rari from inside that call, the attacker withdrew the full 59,000 ETH while burning fewer shares than had been minted, leaving a surplus of roughly 30 shares. The flash loan was repaid and the surplus was redeemed for ETH in a follow-up transaction after the rate normalised.

One published timeline puts the first exploit transaction at 13:48 UTC with the pool paused at 14:34 UTC, protecting roughly a further $6 million, and notes that the exploiting address had been used a day earlier against Value DeFi's vSafe vault on BNB Chain. Rari's post-mortem locates the flaw in how its own pool computed the ibETH exchange rate.

Rari's contributors returned 2 million RGT that had been allocated to them from the developer fund, asking that it be used to reimburse depositors who lost funds. RGT fell from more than $17 before the exploit to about $9.07, close to a 50% drop, before rebounding. No arrest or identification of the attacker has been reported.