Attack on Four_Meme: Uniswap V3 Exploit Nets $183K

Attack on Four_Meme Leads to Loss of $183K: Uniswap V3 Mechanism Exploited

The recent attack on Four_Meme, a decentralized finance (DeFi) project, resulted in a significant loss of approximately $183,000. The incident highlights the vulnerabilities in the Uniswap V3 mechanism and the importance of robust security measures in the DeFi space.

The attack exploited a flaw in the Four_Meme contract's handling of liquidity and token prices. The attacker initially purchased Four_Meme tokens at a very low price before liquidity was added to PancakeSwap, a decentralized exchange. This strategy provided the attacker with two advantages: acquiring tokens at a ridiculously low price and potentially selling them at a much higher price after liquidity was added to the exchange.

In the next phase, the attacker created a trading pair pool on PancakeSwap, pairing the low-price Four_Meme tokens with WBNB (Wrapped Binance Coin). The attacker set the price of the token at an extraordinarily high rate, taking advantage of Uniswap V3's feature that allows for the creation of liquidity pools at predetermined prices.

Once the project launched and liquidity was injected into the PancakeSwap pool, the attacker struck. Using a bot, they added more liquidity to the pool at a much higher price, pushing the price of the token significantly higher. The attacker then sold off the tokens they had acquired at the low price, profiting from the difference between the acquisition and sale prices.

The attack was directed at the Uniswap V3 protocol and its operation. Uniswap V3 provides a feature that allows liquidity providers (LPs) to specify custom price ranges for the pools they're providing liquidity to. However, this feature also allows an LP with malicious intent to create a price range that's conducive to hoodwinking token buyers and sellers, creating a setup that allows them to peg a token price at some artificial range.

In this instance, the mechanism was fully exploited by the attacker, who set up a scenario that artfully created a token price that was totally inflated. The price was artificially pumped up before any of the project's liquidity was made available. By the time the actual liquidity was added and the price "settled," the attackers had already made off with profits amounting to 100 percent of