How Solvency Check Error Led to USP Depegging on Avalanche Based Platypus Finance

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A flaw in a key pricing mechanism led to Platypus Finance’s USP stablecoin losing over 50% of its intended peg with U.S. dollars earlier on Friday. Here's how it happened. By shauryamalwa.

A flaw in a key pricing mechanism led to Platypus Finance’s USP stablecoin losing over 50% of its intended peg with U.S. dollars earlier on Friday, developers said.

Platypus Finance, like other decentralized stablecoin exchanges, relies on smart contracts instead of middlemen for exchanging stablecoins cheaply with low slippage. The product is fairly popular – holding over $50 million in locked tokens as of Thursday. Flash loans are a decentralized finance specific mechanism allowing users to borrow high amounts of capital on little collateral as long as the loan is paid back within the same transaction.

The attacker was also able to get 41 million USP tokens using the $44 million LP tokens as collateral – as Platypus allows users to borrow USP stablecoins against their LP positions. However, the system did not retract the 41 million USP tokens that were issued – in turn allowing the attacker to swap them for the $8.5 million in liquidity available at that time on Platypus.

 

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shauryamalwa Another useless stablecoin

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shauryamalwa Dear coindesk Your reporter published an article about brg at April 2022 . I have some questions about that wrong article : What was your information sources for publishing that false article

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shauryamalwa Will this affect AVA Price?

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