A DeFi lending protocol built on Crypto.com’s Cronos blockchain got taken for roughly $75 million on August 30, after an attacker manipulated the price of a governance token to borrow assets far exceeding its real value. About $6 million made it off the chain before validators shut everything down.
The target was Tectonic, the largest decentralized lending protocol on Cronos.
How the attack worked
According to on-chain researcher Weilin Li, the attacker pumped the price of TONIC, Tectonic’s governance token, by approximately 100x in roughly 20 minutes.
With TONIC’s value artificially bloated, the attacker deposited the token as collateral on Tectonic’s lending platform. TONIC carried a 20% collateral factor, meaning for every dollar of TONIC deposited, you could borrow 20 cents of other assets.
