Rari Capital / Fei Protocol Fuse pools hack — April 2022

Seven Fuse lending pools operated through Rari Capital, which had merged with Fei Protocol under Tribe DAO, were drained in quick succession at about 02:20 Pacific time on 30 April 2022. Rari's own post-mortem puts the loss at approximately $80 million across pools 8, 18, 27, 127, 144, 146 and 156.

Fuse was a fork of Compound. Its CEther contract sent ETH using .call.value()(), which forwards all remaining gas, and exitMarket() on the comptroller was not covered by the codebase's reentrancy lock. That allowed an attacker to re-enter during an ETH borrow and release collateral before the borrow was recorded. Using three accounts per pool, the attacker flash-loaned ETH and stablecoins as supply, borrowed out the pool's ETH liquidity through the reentrancy, received back both the borrowed amounts and the collateral, repaid the flash loans, and then borrowed most of the remaining stablecoin liquidity against a phantom ETH supply balance. In the affected pool on Arbitrum, where ETH was not borrowable, the same reentrancy was reached through ETH redemption instead.

Rari paused borrowing globally, which the team said prevented the attack spreading to other pools. Fei Protocol publicly offered the attacker a $10 million bounty for the return of user funds; it was not taken and the proceeds were sent through Tornado Cash. The fix replaced .call.value()() with .transfer() and corrected the checks-effects-interactions ordering.

After several rounds of governance, Tribe DAO voted on 19 September 2022 with 99% support to repay victims. The on-chain payment was 12.68 million FEI to individual depositors and 26.61 million DAI to affected DAOs. Tribe DAO then wound down.