Summer.fi will cease operations after a $6.04 million hack, with user access available until August 31.
Summer.fi has announced it will wind down operations after suffering a significant hack that resulted in the theft of $6.04 million. The project’s user interface will remain active until August 31, while its future will be decided by its governing DAO.
“After 7 amazing years building in DeFi, the recent exploit on the Lazy Summer Protocol has forced us into the very difficult decision to wind down,” stated the team. They expressed gratitude to their users and supporters for their contributions.
The protocol, operational for nearly seven years, went independent from the Maker Foundation in June 2021. During its run, it attracted over 50,000 users and saw a total value locked in the Lazy Summer Protocol peak at $200 million, although this had plummeted to around $22 million by the time of the attack, as noted by DefiLlama.
The exploit occurred on July 6 when an attacker manipulated the net asset value of USDC vaults within the Lazy Summer Protocol, executing a withdrawal of approximately $6.04 million. This included a loss of about $5.64 million from a lower-risk vault and $400,000 from a higher-risk option.
The hack took advantage of outdated token valuations and a partially decommissioned strategy called Ark, which was still included in active asset calculations despite the deposit limit being set to zero. The team noted that they found no specific errors in their smart contract code.
The attacker employed flash loans exceeding $65 million to artificially inflate asset values, allowing them to extract liquidity from multiple strategies. Prior to the attack, they had begun accumulating tokens from April 6, which facilitated the manipulation.
Significantly, the team reported that a considerable amount of their own funds were trapped in affected vaults, depleting their reserves necessary for recovery and operations. Following the breach, all vaults were paused, and deposit limits for DAO-managed products were set to zero. The team is currently working on resuming withdrawals and redeeming shares from the affected vaults.
Summer.fi's closure mirrors a recent decision by another DeFi service, Zapper, which also cited unfavorable market conditions as a reason for shutting down. Additionally, in the first half of the year, cryptocurrency projects lost around $972 million due to various incidents, according to Immunefi.
