Briefing
A recent exploit on June 26, 2025, targeted Resupply, an on-chain lending protocol, resulting in a loss of approximately $9.8 million. The incident stemmed from a critical vulnerability within a newly deployed ERC4626 crcrvUSD vault, where an attacker leveraged a “first donation” strategy to manipulate the vault’s internal exchange rate. This manipulation allowed the attacker to bypass solvency checks, effectively borrowing substantial reUSD with negligible collateral. The stolen funds were subsequently laundered via Tornado Cash, obscuring the attacker’s trail.
Context
Prior to this incident, the DeFi ecosystem has consistently faced risks associated with newly deployed smart contracts, particularly those with low initial liquidity. Such contracts are highly susceptible to price manipulation attacks, where small capital inputs can disproportionately affect internal valuation mechanisms. The reliance on imprecise integer division in critical financial calculations, especially when combined with external oracle dependencies or initial liquidity conditions, represents a known class of vulnerability that sophisticated threat actors frequently exploit.
Analysis
The attack capitalized on a flawed exchange rate calculation within Resupply’s ResupplyPairCore.sol contract, specifically affecting the _updateExchangeRate() and _isSolvent() functions. By making a minimal “first donation” to a newly deployed, low-liquidity crcrvUSD vault and minting a single wei of shares, the attacker drastically inflated the vault’s perceived value. This artificial inflation caused the protocol’s exchange rate calculation (1e36 divided by the perceived value) to round down to zero due to integer division. With an effective exchange rate of zero, the attacker could then deposit a minuscule amount of collateral (1 wei of crcrvUSD ) to borrow the entirety of the vault’s stored value, amounting to $9.8 million in reUSD.
Parameters
- Protocol Targeted → Resupply (Decentralized Lending Protocol)
- Date of Exploit → June 26, 2025
- Financial Impact → $9.8 Million
- Attack Vector → ERC4626 Vault Exchange Rate Manipulation (Malicious Donation / Integer Division Exploit)
- Vulnerable Component → ResupplyPairCore.sol contract ( _updateExchangeRate() , _isSolvent() functions)
- Laundering Method → Tornado Cash
Outlook
Immediate mitigation for users involved in similar protocols includes verifying the maturity and liquidity of vaults before interacting with them, especially newly deployed ones. For protocols, this incident underscores the critical need for robust input validation, secure handling of integer arithmetic, and comprehensive security audits that specifically address edge cases in exchange rate calculations and initial liquidity scenarios. Implementing circuit breakers or minimum liquidity thresholds for new vaults could prevent similar “first donation” exploits. This event will likely reinforce the industry’s focus on formal verification and rigorous testing of all financial logic, particularly in ERC4626 implementations, to prevent such systemic risks from propagating across the DeFi landscape.
