The Euler Finance $200 million hacker incident triggered a chain reaction in the DeFi ecosystem.

Euler Finance is one of the most innovative projects in the DeFi space in recent years. The protocol categorizes assets into multiple tiers based on their risk levels, with each tier having its specific lending and borrowing permissions. However, on March 13, Euler Finance experienced a major security incident, resulting in a loss of approximately $200 million.

As a foundational lending protocol, the security of Euler is particularly important. Due to the high interconnectedness of the DeFi ecosystem, this attack not only affected Euler itself but also impacted several other DeFi projects, resulting in tens of millions of dollars in cascading losses.

Angle Protocol is a decentralized project focused on non-USD stablecoins, primarily offering the Euro stablecoin agEUR. Users can mint agEUR in two ways: first, through the core module, exchanging stablecoins like USDC at a 1:1 value; second, through the lending module, minting by using assets like WETH as over-collateral. To enhance project returns and incentivize holders, Angle has developed yield strategies similar to Yearn, utilizing the collateral in the core module to generate additional returns. In this incident, Angle estimated a loss of approximately $17.61 million. Despite the project previously having a surplus of $5.58 million, it was still insufficient for full compensation. Therefore, agEUR holders, liquidity providers, and the funds for hedging tokens will be treated as a whole and compensated proportionally.

A certain DEX suffered a loss of approximately $11.9 million due to bbeUSD (Euler Boosted USD) in this incident. The platform launched the Boosted Pools innovative feature at the end of 2021, aiming to enhance LP yields while simplifying user interaction with other lending protocols. However, this innovation also indirectly increased the scale of losses in this incident. In addition to the directly related liquidity pools, LPs of several trading pairs using bbeUSD could only redeem a portion of their funds.

Idle Finance, as a yield aggregator, offers three yield strategies: Best Yield, Senior Tranches, and Junior Tranches. Due to its strategy of selecting high-yield projects, Euler Finance has become an important partner of Idle Finance. In this event, Idle Finance's Best Yield Vault and Yield Tranches have a risk exposure to Euler of $5.3271 million and $5.6628 million, respectively, totaling approximately $10.99 million.

Yield Protocol is a fixed-rate lending protocol that operates in a manner similar to zero-coupon bonds. Its liquidity pool is partially built on Euler, and therefore has been affected. It is expected that the funds deposited in Euler did not exceed $1.5 million before the attack occurred. Notably, the collateral of borrowers remains unaffected as it is stored in Yield Protocol.

A certain yield aggregator stated that its yvUSDT and yvUSDC have a risk exposure of $1.38 million to Euler due to the strategies used from Idle and Angle. The bad debts incurred will be borne by the project party, and all Vaults remain in normal operation.

Another similar yield aggregation project stated that its USDC, USDT, and WETH Vaults have been affected by the use of Idle. Currently, the project has not announced a specific handling plan and advises users not to interact with these Vaults for the time being.

Inverse Finance's main products include the USD stablecoin DOLA, the fixed-rate loan market FiRM, and the DBR representing borrowing rights. Due to the liquidity of DOLA involving the bbeUSD trading pair on a certain DEX, losses were incurred. Inverse Finance stated that despite taking proactive measures to mitigate the losses, DOLA Fed still suffered a loss of $860,000.

SwissBorg is a regulated cryptocurrency asset management platform in multiple countries. The platform stated that the ETH and USDT portions of its Earn strategy suffered losses, including 1617.23 ETH and approximately 1.69 million USDT, which account for 2.27% and 29.52% of the subscribed capital, respectively. SwissBorg has committed to bearing all losses.

As a pioneer in decentralized finance, Opyn has developed the perpetual option Opyn Squeeth and various yield strategies. The affected strategy is its Zen Bull strategy, which combines the Crab strategy and ETH leveraged long positions. Due to the strategy potentially involving collateral lending in Euler, it has suffered losses. Opyn has not yet disclosed the specific loss amount and handling plan.

Sherlock is a Decentralized Finance security service provider responsible for auditing Euler's smart contracts and providing insurance. After Euler suffered an attack, Sherlock proposed to compensate Euler with $4.5 million and has executed $3.3 million in payouts.

Sense Finance, as a fixed-rate lending protocol, has indirectly been affected by fixed income assets such as Idle that can be traded.