Indexed Finance

Hacked

DeFi · $NDX · ✝ 2021

Index pools rebalanced into a flash-loan trap.

Indexed Finance was an Ethereum protocol offering tokenized DeFi index funds. In October 2021 an attacker manipulated pool weights with flash loans during a rebalance, draining roughly $16M; a teenage attacker was later identified.

Peak: ~$16M stolen
Cause: Hacked
Year of death: 2021

☠️ Cause of death

Flash loans were used to distort the pricing of index pools mid-rebalance, letting the attacker swap in worthless value and extract real assets.

📓 Lessons left behind

—Rebalancing logic is vulnerable when prices can be moved.
—Guard index weight changes against flash-loan manipulation.
—Index products inherit every oracle weakness of their tokens.

🌱 The idea that survived

Manipulation-aware rebalancing

Reinforced flash-loan-resistant pricing in automated index and AMM rebalancing.

#defi#flash-loan#oracle#ethereum