Euler protocol loses $200M in hack due to code vulnerability. Euler, a prominent DeFi lending protocol known for its risk management, has suffered a $200M exploit in what may be the largest DeFi exploit of 2023. The protocol held over $400 million of user assets at the time, and the attacker was able to steal nearly $136M of Lido Finance's stETH, $34M of USDC, $18.5M of WBTC, and $8.8M of DAI. A vulnerability in a smart contract function that was added during a major overhaul eight months ago caused the exploit. It allowed the attacker to create an underwater position and liquidate themselves using another malicious contract they created. Flash loan attacks, which allow users to borrow large amounts of money without posting any collateral, are all too common in DeFi. The Euler team is working with security firms and law enforcement to track and recover the stolen funds. Many protocols that either deposited funds in Euler or had indirect exposure have been affected by the exploit.