SIR.trading Suffers $355,000 Loss in Security Breach

On March 30, 2025, the DeFi protocol SIR.trading experienced a significant security breach, resulting in the loss of approximately $355,000 in total value locked (TVL). This incident highlights the persistent security risks within decentralized finance ecosystems and underscores the need for a critical assessment of the robustness of newly developed technologies.

The exploit was identified by security firms TenArmor and Decurity, who determined that the breach occurred due to a vulnerability in the Vault contract of the SIR.trading protocol. The flaw was traced back to the uniswapV3SwapCallback function, which was compromised because Ethereum's Dencun hard fork implemented temporary storage. This allowed the attacker to alter essential security information during program execution, ultimately leading to the unauthorized authorization of an address and the complete loss of funds.

The stolen assets were tracked to Railgun, which helped SIR.trading’s founder, Xatarrer, locate the currency. Xatarrer described the incident as an unprecedented disaster but expressed determination to rebuild the protocol following the financial loss. Security experts characterized the attack as intelligent, leveraging ephemeral storage, and warned that smart contract developers must enhance their defense mechanisms to protect against future vulnerabilities.

This incident exposes serious flaws in DeFi protocols and raises concerns about the security of transient storage in emerging Ethereum operations. It serves as a cautionary lesson for both developers and DeFi users, emphasizing the need to understand the evolving DeFi environment and the potential risks associated with it.