Ethereum DeFi platform Makina Finance suffered a flash loan exploit on Jan. 20, 2026, that cost the protocol roughly 1,299 ETH — about $4.1 million. Blockchain security firm PeckShield and others say the attacker used a massive $280 million USDC flash loan, deploying roughly $170 million to manipulate Makina’s MachineShareOracle and distort prices in the DUSD–DUSDC Curve liquidity pool.
According to PeckShield, the attack followed a familiar price-manipulation pattern: the attacker temporarily supplied liquidity, inflated spot prices via the oracle, then executed large trades (about $110 million) and withdrew LP positions for profit. The exploit ultimately drained over 1,000 ETH from the pool. PeckShield called the root cause “a classic price manipulation issue.”
An unusual twist: the transaction that emptied the pool was frontrun by an MEV builder (address 0xa6c2...), which captured the bulk of the proceeds. PeckShield noted that having the funds held by an identifiable MEV builder “provides a better choice in getting the stolen funds back,” though there’s no public indication Makina has contacted that party. PeckShield also tracked the stolen funds to two addresses: 0xbed2...dE25 (~$3.3M) and 0x573d...910e (~$880K).
Makina said the incident appears isolated to DUSD LP positions on Curve and that other assets and deployments remain unaffected. The team has put all smart vaults (its “Machines”) into security mode and urged liquidity providers in the affected DUSD Curve pool to withdraw remaining liquidity while it assesses next steps and prepares updates.
Flash-loan price attacks remain a recurring threat in DeFi: Bunni was drained of $8.4 million in October, and Shibarium lost $2.4 million in a September flash-loan incident. Still, Chainalysis reported that overall DeFi losses from hacks stayed relatively low in 2025 even as total value locked climbed back toward prior highs — a reminder that risk persists even as the sector hardens its defenses.
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