Scream protocol losses millions to stablecoin depeg

Scream, a decentralized lending protocol connected the Fantom network, incurred a $35 cardinal indebtedness aft failing to set the prices of 2 stablecoins that mislaid their peg connected its platform. 

The DeFi protocol had hardcoded the worth of these affected stablecoins, Fantom USD (fUSD) and DEI, to $1, meaning their diminution did not bespeak connected its platform.

Whales holding the coins took vantage of this to drain the protocol of each different stablecoin portion depositing the 2 de-pegged tokens. Stablecoins taken from the level see FRAX, Fantom USDT, USDC, and MIM.

Early days but it appears @Screamdotsh has go insolvent; truthful radical can't retreat their funds 😬😱

They judge $fUSD arsenic $1 collateral (but it's disconnected peg); look to person accidentally acceptable the deposit bounds to ♾; millions rapidly borrowed against the atrocious debt… 💰$FTM $SCREAM pic.twitter.com/4wwZZsadgh

— The Fantom Ecologist 👻 (@ftm_ecologist) May 16, 2022

With DEI falling to arsenic debased arsenic $0.52 and fUSD reaching $0.69, the protocol has recorded immense losses. But the information that fUSD had an infinity bounds connected the level made things worse and allowed the actors to drain the protocol by borrowing against the atrocious debt.

According to information connected DeFiLlama, the protocol has mislaid 50% of the full worth of assets locked successful its astute declaration wrong the past 24 hours.

Apart from that, autochthonal token $SCREAM has besides shed implicit 50% of its value. As of property time, it is trading for $3.18, according to data connected CoinGecko.

Scream reveals it is moving with Fantom Foundation for solution

Scream acknowledged the lawsuit and said it is moving with Fantom Foundation to code the issue.

We are presently moving connected a solution to the fUSD atrocious indebtedness issue. The Fantom Foundation has agreed to tally a liquidation bot that volition liquidate immoderate underwater positions that usage fUSD arsenic collateral.

— 😱 (@Screamdotsh) May 16, 2022

The team’s projected solution is to “liquidate each underwater fUSD loans utilizing a liquidation bot.”

It besides continued to hardcode the fUSD terms to $0.81 wrong the adjacent mates of hours. This could pb to liquidation for those who had maintained a steadfast position. So the protocol has directed those who had debts with it to repay their loans to debar being liquidated.

For DEI, it stated that DEUS Finance DAO, the superior issuers, has decided to merchantability treasury bonds to reconstruct the peg. 

Scream besides announced a alteration successful its policy. It’ll present commencement utilizing Chainlink Oracles to get the prices successful real-time alternatively of hardcoding them. This way, it would forestall a recurrence of this successful the future.