article 🔥💰 Arcadia Finance Hit by $2.5M Hack on Base Blockchain – Full Breakdown of the Attack 💰🔥

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Overview of the Incident

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In a significant security breach, Arcadia Finance, a DeFi platform operating on the Base blockchain, has fallen victim to a cyberattack that resulted in the loss of $2.5 million worth of digital assets.
The exploit targeted a vulnerability within Arcadia’s Rebalancer contract, allowing the attacker to manipulate swap parameters and drain user funds undetected.

Blockchain security experts at Hacken identified the issue, confirming that the hackers took advantage of poorly validated swapData parameters, which enabled them to perform unauthorized swaps across multiple assets.

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Step-by-Step Breakdown: How the Hack Happened

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• July 14th, 10:58 PM UTC:
  The attacker funded their wallet through Tornado Cash on Ethereum and quickly bridged those funds over to the Base blockchain.

• July 15th, 04:03 AM UTC:
  A malicious contract was deployed on Base. The exploit was triggered within one minute of deployment.

• The attacker drained user vaults holding assets such as:

  • USDC

  • WETH

  • USDS

  • EURC

  • AERO

  • WELL

All stolen assets were quickly swapped into Wrapped Ethereum (WETH) and bridged back to Ethereum Mainnet.

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Technical Details of the Exploit

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The vulnerability came from inadequate validation of the swapData parameters in the Rebalancer contract. This loophole allowed malicious swaps without triggering any of Arcadia's standard security measures.

Here’s what the attackers gained:

• 199 WETH

• 965.8 million AERO tokens

Assets were funneled through 12 separate wallets in an effort to obscure the trail.

All stolen crypto was eventually moved to fresh Ethereum wallets to further complicate tracking.

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Official Response from Arcadia

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Arcadia Finance confirmed the incident on X (formerly Twitter), advising users to revoke any active permissions linked to the Rebalancer contracts. They specifically warned users about older Rebalancer contracts which might still hold approvals.

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Why This Matters: Growing DeFi Security Risks

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This marks Arcadia’s second security failure, following a $455,000 hack in October 2023, which also stemmed from weak smart contract validation and lack of reentrancy protection.

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The Bigger Picture in 2025:

DeFi platforms across the board are facing heightened scrutiny as CertiK reports over $2.47 billion lost in hacks during the first half of 2025 alone.