Silo Finance Loses $545,000 in Smart Contract Exploit, SILO Price Drops 11%

Coin WorldWednesday, Jun 25, 2025 1:06 pm ET
1min read

Silo Finance, a decentralized crypto lending protocol, confirmed on Wednesday that hackers had exploited a smart contract in its network, resulting in a loss of approximately $545,000. The vulnerability was identified in a user-controlled input issue within the contract’s openLeveragePosition function, as reported by blockchain security firm PeckShield. Silo Finance promptly responded to the incident, assuring users that the core smart contracts, including markets and vaults, remained unaffected. The compromised contract was part of an experimental leverage feature under testing and was not integrated into the main protocol infrastructure.

The exploit was traced to a wallet that received funds via Tornado Cash, a crypto mixing service designed to obscure transaction trails. PeckShield’s threat intelligence system detected the suspicious code three minutes and twenty seconds before the exploit was executed, highlighting the effectiveness of real-time monitoring in mitigating such threats. Silo Finance’s co-founder, Aiham Jaabari, confirmed that no user funds were lost, as the affected contract was solely used for testing purposes with internal funds from Silo DAO, the decentralized autonomous organization overseeing protocol governance.

In response to the breach, Silo Finance paused the affected contract and issued a statement explaining the limited scope of the exploit. The team emphasized that the core contracts, where user funds are held, were not compromised. The paused contract was not yet officially deployed as part of Silo’s main product offering, ensuring that no user deposits were affected. The internal funds used to test the experimental leverage feature were the sole assets lost in the exploit.

Following the incident, SILO’s price experienced a significant decline, plunging to approximately $0.04035, an 11% decrease in the last 24 hours. On-chain analytics indicated that SILO traders rushed to offload or rebalance their holdings after the smart contract breach. The 14-day Relative Strength Index (RSI) fell below 36, suggesting that the token had entered oversold territory. Meanwhile, the 50-day moving average stood well above current price levels, at approximately $0.055, indicating a potential continuation of the short-term downtrend.

Separately, blockchain security investigators tracked on-chain activity from the Cork Protocol exploiter, who had previously drained roughly $12 million from the protocol in May. On the same day as the Silo hack, PeckShield Alert flagged transactions from addresses previously linked to the attacker. The exploiter sent a total of 4,520 ETH, worth around $11 million, to Tornado Cash, marking the first fund movement from the exploit-related addresses since the May 28 breach. The original exploit targeted Cork’s wstETH:weETH market, leading to the theft of 3,761 wrapped staked ETH (wstETH).