$4.1M Vanishes in Seconds: MakinaFi Hit by Flash Loan Attack as MEV Bots Rush In
DeFi Platform Makina Finance Hit by $4.1 Million Flash Loan Exploit, Raising Fresh Security Fears in 2026
A major decentralized finance platform has become the latest victim in a growing wave of sophisticated crypto attacks, underscoring persistent security vulnerabilities across the DeFi sector even as the industry enters 2026.
Makina Finance, a DeFi-focused yield and asset management protocol, suffered a significant security breach on January 20 after hackers exploited one of its stablecoin liquidity pools. Blockchain analysts estimate the attackers made off with approximately 1,299 ETH, valued at roughly $4.1 million at prevailing market prices.
The incident was first flagged by blockchain security firm PeckShield, which detected suspicious on-chain activity linked to MakinaFi’s DUSD/USDC pool. Within minutes of the alert, independent on-chain trackers identified the stolen funds consolidated into two Ethereum wallets, confirming the exploit had been executed quickly and cleanly.
The attack has reignited concerns about the structural risks facing decentralized finance platforms, particularly those offering complex yield strategies built atop multiple protocols. Despite years of audits, tooling improvements, and increased user awareness, flash loan exploits continue to drain millions from DeFi ecosystems with alarming speed.
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| Source: XPost |
A Precise and Coordinated Attack
According to investigators, the exploit targeted MakinaFi’s DUSD/USDC liquidity pool, which is hosted on Curve Finance, a major decentralized exchange optimized for stablecoin trading. The pool connects USDC with DUSD, a yield-bearing token designed to generate returns through automated on-chain strategies.
The attacker deployed a classic but highly effective flash loan attack, a technique that allows users to borrow massive amounts of capital without collateral, provided the loan is repaid within a single blockchain transaction. Flash loans, while legitimate tools in DeFi, are frequently abused to manipulate prices, drain liquidity pools, or exploit logic flaws in smart contracts.
In this case, the attacker borrowed substantial funds from multiple lending protocols, including Aave and Morpho, before executing a rapid sequence of trades across Curve and Uniswap.
By temporarily distorting the price relationship between DUSD and USDC inside the Curve pool, the attacker was able to extract significantly more value than the pool’s design should have allowed. The manipulated trades were completed, the flash loans were repaid, and the attacker exited the transaction with 1,299 ETH in profit, all within seconds.
Security analysts say the exploit demonstrates how composability, one of DeFi’s greatest strengths, can also become a major weakness when multiple protocols interact in unexpected ways.
MEV Bots Join the Scramble
The incident was not solely a hacker-versus-protocol event. On-chain data shows that an MEV, or Maximal Extractable Value, bot also managed to profit from the chaos.
MEV bots constantly monitor the Ethereum mempool for lucrative trading opportunities, attempting to insert their own transactions before, after, or alongside high-value trades. In this case, an MEV builder address beginning with 0xa6c2 successfully inserted itself into the transaction bundle and captured approximately 0.13 ETH.
While the amount was small compared to the overall theft, analysts say it highlights how competitive and aggressive the Ethereum transaction environment has become. Even attackers executing multimillion-dollar exploits must contend with automated bots racing to skim profits.
Industry observers increasingly describe the DeFi landscape as an arms race, where developers, hackers, and MEV operators are locked in constant competition, each pushing technical limits in search of advantage.
Tracking the Stolen Funds
As of the latest on-chain data, the stolen ETH remains unmoved across two primary wallets:
One wallet, 0xbed2…dE25, holds approximately $3.3 million worth of ETH
A second wallet, 0x573d…910e, contains roughly $880,000
Notably, the funds have not yet passed through privacy tools such as mixers or cross-chain bridges. This has given blockchain investigators a narrow but critical window to monitor every transaction and potentially identify patterns linked to previous exploits.
In response to the breach, multiple security firms, including PeckShield, ExVul, and TenArmor, issued public warnings urging users to revoke smart contract permissions and avoid interacting with MakinaFi contracts until further notice.
Makina Finance itself has not released an official public statement as of publication, and it remains unclear whether user funds outside the affected pool were impacted.
Why Stablecoin Pools Remain Prime Targets
Stablecoin pools are among the most attractive targets for attackers because they often hold deep liquidity and rely on tightly balanced pricing mechanisms. Even small distortions in price assumptions can lead to outsized losses when exploited at scale using flash loans.
MakinaFi’s DUSD token was designed to generate yield through automated strategies deployed across multiple DeFi protocols. While these designs can offer attractive returns during stable market conditions, they also introduce layered risks that are difficult to fully model.
Security experts say this attack reinforces a hard truth: complexity in DeFi does not necessarily equal safety. In some cases, it increases the attack surface.
Over the past year alone, DeFi exploits have drained billions of dollars from users worldwide, with flash loan attacks ranking among the most common techniques used by hackers.
A Persistent Challenge for DeFi in 2026
Despite repeated warnings and high-profile incidents, flash loans remain a double-edged sword. They enable capital efficiency and advanced arbitrage strategies, but also allow attackers to marshal enormous financial power instantly, bypassing traditional risk constraints.
For everyday users, the MakinaFi exploit serves as another reminder that decentralized finance, while innovative, still carries significant risk. Unlike traditional financial institutions, DeFi platforms typically lack insurance, regulatory backstops, or guaranteed recovery mechanisms.
Once funds are lost on-chain, recovery is often unlikely.
As DeFi continues to evolve in 2026, the challenge for developers will be balancing innovation with resilience. Meanwhile, users are increasingly urged to diversify risk, limit exposure, and treat high-yield opportunities with caution.
In the fast-moving world of decentralized finance, opportunity and danger often arrive in the same transaction.
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Writer @Ethan
Ethan Collins is a passionate crypto journalist and blockchain enthusiast, always on the hunt for the latest trends shaking up the digital finance world. With a knack for turning complex blockchain developments into engaging, easy-to-understand stories, he keeps readers ahead of the curve in the fast-paced crypto universe. Whether it’s Bitcoin, Ethereum, or emerging altcoins, Ethan dives deep into the markets to uncover insights, rumors, and opportunities that matter to crypto fans everywhere.
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