1inch Stock Plummets 15% After 5 Million Dollar Smart Contract Hack

On March 7, 2025, the 1inch team identified a critical vulnerability in its old version Fusion v1 Parser smart contract. This security flaw resulted in significant financial losses, with approximately 2.4 million USDC and 1,276 WETH being compromised, totaling over 5 million dollars. The SlowMist Security Team conducted an analysis of the incident, confirming that the vulnerability did not affect end-user funds. Instead, it impacted only those using the Fusion v1 parser contract.

The 1inch team promptly took measures to address the issue, actively monitoring the security situation and urging all affected resolvers to audit and update their contracts immediately. This swift response aimed to ensure the security of the system and prevent further losses. The incident highlights the ongoing challenges in the decentralized finance (DeFi) ecosystem, where security remains a critical concern despite rapid growth and innovation.

Smart contract vulnerabilities can lead to substantial financial losses and undermine user trust in the ecosystem. The incident underscores the importance of thorough security audits and continuous monitoring to identify and mitigate potential risks. The 1inch team's prompt action and transparency in addressing the vulnerability demonstrate their commitment to maintaining the integrity of the DeFi ecosystem.

The SlowMist Security Team's analysis provides valuable insights into the potential risks associated with smart contract vulnerabilities. The team's findings emphasize the need for continuous monitoring and auditing of smart contracts to identify and mitigate potential risks. The incident also highlights the importance of collaboration between security teams and DeFi platforms to address vulnerabilities and ensure the security of the ecosystem.

In response to the incident, the 1inch team has been actively working with affected resolvers to ensure the security of their systems. The team's efforts demonstrate their dedication to protecting user funds and maintaining trust in the DeFi ecosystem. The incident serves as a reminder for other DeFi platforms to prioritize security and implement robust measures to protect user funds and maintain trust in the ecosystem.