Wasabi Protocol Loses $4.5 Million Due to Compromised Admin Key

The decentralized finance sector continues to experience significant losses, with Wasabi Protocol being the latest victim. On Thursday, the protocol, which operates as a perpetuals trading platform on Ethereum and Base, was drained of about $4.55 million after its deployer key was compromised, according to security firm Blockaid. This incident is the latest in a series of DeFi losses that have exceeded $605 million across at least 12 incidents this month. The attack bears a striking resemblance to the Drift Protocol exploit, which occurred on April 1, where North Korea-linked attackers utilized a compromised admin key to drain $285 million from the Solana-based perpetuals exchange. The compromise was made possible through an externally owned account called wasabideployer.eth, which held the sole admin role in Wasabi's permission system. Once the attackers gained access to the deployer key, they granted themselves admin privileges without any delay by calling grantRole on the permission contract. Subsequently, their helper contract upgraded Wasabi's perp vaults and Long Pool to malicious implementations that drained the balances, as reported by Blockaid. The exploit leveraged the Universal Upgradeable Proxy Standard (UUPS), which allows a smart contract to modify its underlying code while retaining the same address. Although UUPS is widely used for its convenience in fixing bugs without requiring user migration, it poses a significant risk if an attacker gains control of admin permissions, as they can replace the contract's logic with malicious code designed to steal funds. Wasabi's lack of a timelock or multisig to protect the admin role made it particularly vulnerable to this type of attack. A timelock would have introduced a delay between the announcement and execution of an admin action, providing users with time to react, while a multisig would have required multiple signers to approve changes. The absence of these security measures meant that a single key held full control over the protocol. Blockaid's exploit detection system identified the ongoing admin-key compromise exploit on Wasabi Protocol across both Ethereum and Base. The compromised contracts include various vaults on both platforms, such as wWETH, sUSDC, wBITCOIN, wPEPE, and Long Pool vaults on Ethereum, as well as sUSDC, wWETH, sBTC, sVIRTUAL, sAERO, and sBRETT vaults on Base. Users holding Wasabi LP tokens were advised to revoke any active approvals to the vault contracts, as the underlying assets backing those tokens were either drained or remained at risk. This incident is part of a larger trend of exploits that have plagued the DeFi sector this month, with cumulative losses exceeding $770 million across more than 30 reported incidents. The common thread among these incidents is not a new vulnerability but rather the repeated exploitation of known weaknesses, with each incident prompting the same discussions about lessons learned, only to be followed by another exploit before those lessons can be implemented. Wasabi Protocol has not yet released a public statement regarding the incident.