Arcadia Finance Attacked on Ethereum Layer-2 Base Network Loses $3.5 Million

Blockchain security firm Certik has revealed that a major decentralized finance (DeFi) protocol, Arcadia Finance, is currently under attack on the Ethereum Layer-2 network called Base. The attack, which was first detected by Certik, resulted in an initial loss of approximately $1.6 million. The attacker exploited the Rebalancer contract through arbitrary use of swapdata, allowing them to steal funds from Arcadia Finance.

Certik's initial statement highlighted the suspicious transactions and the method used by the attacker. A few hours later, Certik updated their report, indicating that the attack was ongoing and that the total loss had escalated to approximately $3.5 million. This significant increase in the amount stolen underscores the severity and persistence of the attack.

Arcadia Finance, a DeFi platform backed by Coinbase Ventures, confirmed the attack through a post on their official X (formerly Twitter) account. The platform warned users about unauthorized transactions made through the Rebalancer contract and advised them to remove all asset manager permissions. Additionally, users were instructed to disconnect Rebalancer and Compounder on the platform's website to mitigate further risks.

Arcadia Finance is known for its permissionless borrowing, lending, leveraging, and asset swapping services, making it a popular choice among DeFi users. The attack on Arcadia Finance highlights the ongoing security challenges faced by DeFi protocols, despite advancements in blockchain technology and security measures.

Certik, a leading company in Web3 security, has been instrumental in identifying and mitigating security threats in the crypto and DeFi space. In a report published last month, Certik revealed that crypto users and DeFi protocols lost a total of $302 million in May 2025, marking a 17% decrease compared to April. This report underscores the importance of continuous monitoring and security enhancements in the DeFi ecosystem.

Certik's efforts in securing the DeFi space are supported by major investors, including Sequoia Capital, Tiger Global, and Goldman Sachs. The company is expected to reach a valuation of $2 billion by 2024, reflecting its growing influence and expertise in the field of blockchain security. The attack on Arcadia Finance serves as a reminder of the need for vigilance and robust security measures in the rapidly evolving world of decentralized finance.