Makina Finance has lost $5 million in a hack involving oracle manipulation, prompting calls for improved security in DeFi protocols.
Makina Finance, a decentralized finance (DeFi) protocol, has been hacked, resulting in a loss of approximately $5 million from its stablecoin pool. Security firm CertiK confirmed the breach, noting that the Dialectic USD/USDC Stableswap pool was manipulated, with $4.14 million diverted to an address belonging to an MEV (Miner Extractable Value) builder.
The attackers exploited oracle manipulation, utilizing a flash loan of 280 million USDC to distort price data in the MachineShareOracle that the protocol depended on. This led to the complete draining of the DUSD/USDC pool on Curve.
In response to the incident, Makina's developers acknowledged they are investigating the situation and emphasized that the issue appears confined to the DUSD liquidity providers on Curve, with no other assets reportedly affected. They urged users in the DUSD Curve pool to withdraw their funds as a precautionary measure.
"As a precaution, all Machines have activated security mode while we continue to assess the situation," the team stated.
The full extent of the losses remains unclear, but estimates from security experts GoPlus Security and PeckShield indicate the theft could be around $5.1 million and 1299 ETH (approximately $4.1 million), respectively. At the time of the hack, Makina Finance's total value locked (TVL) was reported to be $100 million.
Calls for Enhanced Security Measures
In light of the attack, Dejun Pak, a senior security researcher at a16z crypto, advocates for integrating security directly into DeFi protocols. He suggests implementing standardized specifications that would restrict permissible actions and revert any transactions that breach these specifications, arguing that this could prevent many known attacks.
"Almost every known attack could have been thwarted at the execution stage with such checks," Pak noted.
However, experts warn that while these measures could enhance security, they might also increase transaction costs, making them less appealing for users seeking low fees. The complexity of configuring these protections effectively is another challenge, as highlighted by Felix Wilhelm of Asymmetric Research, who noted that developing reliable checks without impeding legitimate operations can be extremely difficult.
Despite these challenges, some protocols, like the Solana lending platform Kamino and developers of the XRP Ledger, are already implementing such security measures to safeguard against vulnerabilities.
Recent statistics show that in 2025 alone, hackers exploited code vulnerabilities to steal over $649 million, emphasizing the urgent need for improved security in the DeFi sector. Notably, nearly 80% of cryptocurrency projects fail following major security breaches, according to Immunefi CEO Mitchell Amador.
