Tokenized Stocks Fail as Collateral in $403K DeFi Exploit

A DeFi lending protocol called Edel was exploited for $403,000. The exploit targeted tokenized stocks being used as collateral and manipulated their exchange rate to inflate their value roughly 78 times.

The attacker used a flash loan to repeatedly supply and borrow against the inflated collateral, supporting real borrowed assets including USDC and other wrapped positions.

Security firms estimated losses ranging from $204,000 to $353,000, but the critical failure lay in the exchange rate between the wrapped token and its underlying counterpart. Alphabet's share price did not drive the exploit.