Resupply’s $9.6M Loss Highlights Persistent Risks in Synthetic Asset Markets

Synthetic asset markets in decentralized finance (DeFi) are designed to mirror real-world assets or derivatives, but their reliance on low-liquidity pools and single price oracles creates inherent risks. The recent attack on Resupply demonstrates how easily these markets can be distorted, as an attacker manipulated the price of cvcrvUSD, a wrapped version of Curve USD staked on Convex Finance.

By sending targeted donations to the CVC/RVUSD vault, the attacker artificially inflated the token’s share price, which was then used as collateral to borrow nearly $10 million in reUSD, Resupply’s native stablecoin.

How Did the Attacker Bypass Security Checks in Resupply’s Protocol

The exploit hinged on a flaw in the smart contract’s price logic, specifically within the ResupplyPair (CurveLend: crvUSD/wstUSR) contract. The attacker used floor division in the contract’s exchange rate calculation, allowing them to round down the manipulated rate to zero and borrow massive amounts of reUSD with just one wei of cvcrvUSD as collateral.

This completely bypassed solvency checks and exposed a critical vulnerability in the protocol’s design.

Did you know?
Synthetic assets in DeFi allow users to gain exposure to real-world assets or derivatives without direct ownership, but this flexibility comes with heightened risks when protocols rely on limited oracles and thin liquidity pools for price determination.

Why Are Oracle-Dependent Systems a Prime Target for Manipulation

Oracle-dependent systems rely on external price feeds to determine asset values, making them susceptible to manipulation if the underlying market is thin or illiquid. In this case, the attacker exploited the low liquidity of the CVCRVUSD market, inflating its price with minimal funds and tricking the protocol into accepting it as high-value collateral.

Industry experts, including Meir Dolev of Cyvers, emphasize that proper input validation, multiple oracle checks, and edge-case testing could have mitigated this risk.

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Can DeFi Protocols Restore Trust After High-Profile Exploits

Following the attack, Resupply swiftly paused the affected contracts and initiated a thorough investigation. The team assured users that the compromise only affected the wstUSR market and promised a comprehensive postmortem. However, restoring user confidence will require more than technical fixes.

Transparent communication, compensation plans for affected users, and a commitment to rigorous security practices will be essential for rebuilding trust in the protocol and the broader DeFi ecosystem.

The Broader Implications for Decentralized Finance and Synthetic Assets

The resupply exploit is not an isolated incident. It reflects a broader trend of attacks targeting low-liquidity, oracle-dependent markets in DeFi. In 2025 alone, billions of dollars have been lost to similar exploits, illustrating the need to implement enhanced security measures and robust risk management frameworks.

The incident serves as a sharp reminder that innovation in synthetic assets must be matched with equally advanced security protocols to protect user funds and maintain the stability of decentralized finance.