NORMIE, a meme coin project of the Base ecosystem, was rocked by a flash loan attack on May 26, when its price fell by 93% in a short time. This incident highlights the vulnerabilities that still plague the DeFi (decentralized finance) space and the difficulties projects face in mitigating such attacks. Details here…
Meme coin was attacked by flash loan
According to CoinGecko data, the attack was carried out through a series of strategic maneuvers carried out by the attacker. Blockchain researcher @onchainfudder revealed that the attacker found a critical vulnerability in the NORMIE contract. With only 0.63% of the coins remaining in circulation, the attacker was able to repeatedly manipulate the buy and sell functions after disabling transaction fees. This triggered a mechanism built into the contract designed to automatically sell tokens in excess of 1% when fees reach a certain threshold.
The attacker’s actions led to a massive sell-off that brought the price down significantly. But the story does not end there. The attacker then purchased a large amount of these tokens sold at almost zero price in the same transaction block. This tactic allowed them to make a huge profit from the entire operation.
How did the project benefit?
It is important to note that although the attack caused significant financial losses to NORMIE owners, the project itself also benefited to some extent. The automated token dump resulting from the attacker’s manipulation generated significant funds for the project through transaction fees. This raises concerns about conflicts of interest and the possibility that the project party may have known about violations in advance.
NORMIE responded to the attack with an official statement and apologized for the incident. They assured users that the distributor still has over 500 ETH in their wallet and that they plan to use it for compensation and recovery efforts. The project is actively looking for solutions and is reaching out to key partners to address the situation.
What then?
But the way forward remains unclear. The NORMIE team has not yet confirmed whether a complete redistribution of the project or fork is needed. Additionally, they warned users not to purchase NORMIE tokens until further notice, citing the risk of an attacker manipulating the token supply through further minting or purchasing.
This flash loan attack on NORMIE is a stark reminder of the evolving nature of DeFi threats. While the project takes steps to recover, the incident raises questions about its potential impact on the project’s security infrastructure and investor confidence. As the NORMIE team navigates this crisis, the broader DeFi community is watching their solution carefully, hoping to learn valuable lessons that can help strengthen the entire ecosystem against future attacks.
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