Welcome to Finance Redefined, your weekly dose of essential decentralized finance (DeFi) insights — a newsletter crafted to bring you the most significant developments from the past week.
The past week in DeFi saw an unprecedented chain of events unfold on Dec. 14 when a malicious actor exploited a vulnerability in the Ledger hardware wallet’s connector library. The exploit put the entire decentralized application (DApp) ecosystem at risk. On-chain analysts and DApps like SushiSwap and MetaMask advised users not to interact with their wallets at all.
Ledger released a patch within hours to contain the vulnerability, but the exploiter drained over $650,000 in assets from multiple victims. However, considering the number of wallets and DApps at risk, the drained amount was considerably lower than it could have been.
How the Ledger Connect hacker tricked users into making malicious approvals
The “Ledger hacker,” who siphoned at least $484,000 from multiple Web3 apps on Dec. 14, did so by tricking Web3 users into making malicious token approvals, according to the team behind blockchain security platform Cyvers.
According to public statements made by multiple parties involved, the hack occurred on the morning of Dec. 14. The attacker used a phishing…
