DeFi just received another sharp wake-up call. On January 20, 2026, Makina Finance, a prominent yield and asset management platform, suffered a critical exploit resulting in the theft of roughly 1,299 $ETH (valued between $4.1M and $4.2M).
This wasn’t a leaked private key or a phishing scam—it was financial engineering weaponized.
The Mechanics of the Heist 📉
The attacker executed a classic Flash Loan Attack, a technique that allows users to borrow massive amounts of capital without collateral, provided they return it within the same transaction block.
Here is how the drain happened:
The Borrow: The attacker leveraged protocols like Aave and Morpho to borrow heavy liquidity.
The Manipulation: Using these funds, they manipulated prices via swaps on Curve and Uniswap.
The Drain: The DUSD/USDC Curve pool was emptied in a single transaction before the loan was repaid.
Interestingly, an MEV (Maximum Extractable Value) bot even managed to front-run the exploit, snagging a small 0.13 ETH profit while the attacker split the massive haul of ~$4.2M into two separate wallets.
Immediate Action Required 🛡️
Makina Finance has officially urged all users to withdraw funds immediately from the DUSD Curve pool. While they have activated "security mode" on other machines and claim the issue is isolated to DUSD, trust is fragile.
Security firms like PeckShield and TenArmor are recommending a step further: Revoke contract permissions associated with the protocol to prevent further unauthorized drains.
The Aftermath
As of now, the stolen funds (~$3.3M in one wallet, ~$880K in another) have not moved to centralized exchanges or privacy mixers like Tornado Cash. The funds are sitting still—monitoring continues.
This incident highlights that despite the maturity of the 2025–2026 cycle, flash loan vulnerabilities in stablecoin pools remain a primary vector for DeFi exploits.
Are your contract permissions regularly audited, or do you "set and forget"? 👇