Ribbon Finance (Formerly Aevo) Bleeds $2.7M in Latest DeFi Exploit – A Stark Reminder of Protocol Vulnerabilities

Another day, another multimillion-dollar hole punched in the DeFi ecosystem. Ribbon Finance, the rebranded options and structured products platform, just got hit—hard.

The Exploit Unpacked

The attack siphoned off a cool $2.7 million. While the technical specifics are still emerging, early analysis points to a sophisticated contract interaction that bypassed standard security checks. It's a classic case of a logic flaw being exploited for profit, not some brute-force attack.

More Than Just a Bad Day

This isn't just about one protocol's bad luck. It's a systemic stress test. Every exploit like this forces the entire industry to scrutinize its smart contract audit processes and risk management frameworks. The funds might be gone, but the lessons are invaluable—and expensive.

The Bullish Silver Lining

Here's the contrarian take: these events, while painful, are the growing pains of a maturing industry. Each hack hardens the ecosystem. It pushes developers to build more robustly, encourages insurers to create better products, and reminds users that self-custody means self-responsibility. The market has weathered far worse and emerged stronger.

The path to a trillion-dollar DeFi market is paved with incidents like this—each one a costly tuition fee paid for a more secure financial future. Just ask any traditional banker about their last operational loss; sometimes the 'legacy' system isn't so different after all.

Ribbon Finance’s oracle price upgrade had weaknesses

Six days before the attack, Ribbon Finance’s team updated the oracle pricer to support 18 decimals for stETH, PAXG, LINK, and AAVE. However, other assets, including USDC, were still at eight decimals, and according to Zhou, the discrepancy in decimal precision contributed to the vulnerability that was exploited on Friday.

The latest @ribbonfinance attack appears to be a oracle configuration fault.

6 days ago, the owners updated the oracle pricer which uses 18 decimals price for stETH, PAXG, LINK and AAVE. However, other assets like USDC Price still at 8 decimals.

creation of OToken is not a… pic.twitter.com/4cpZUNTNun

— Weilin (William) Li (@hklst4r) December 13, 2025

According to a pseudonymous developer going by the username Weilin on X, the creation of oTokens themselves was not illegal because every underlying token must be whitelisted before it’s used as collateral or a strike asset, a procedure the attacker followed to the letter.

The malicious activity began with the creation of poorly structured option products, where one product consisted of a stETH call option with a 3,800 USDC strike, collateralized with WETH, set to expire on December 12. The attacker then created several oTokens for these options, which were later exploited to drain the protocol.

The attack involved repeated interactions with the proxy admin contract at 0x9D7b…8ae6B76. Some functions, like transferOwnership and setImplementation, were used to manipulate the price-feed proxies through delegate calls. The hacker invoked an implementation for the oracle to set asset expiry prices at the same timestamp to cause ExpiryPriceUpdated events that confirmed the fraudulent valuations.

The manipulated prices made the system recognize stETH as being far above the strike price and burned 225 oTokens, yielding 22.468662541163160869 WETH. In total, the hacker extracted approximately 900 ETH through this method.

Web3 security firm Spectre spotted the initial transfers to a wallet address at 0x354ad…9a355e, but from there, the money was distributed to 14 more accounts, with many holding around 100.1 ETH each. Some of the stolen funds have already entered what blockchain Zhou referred to as “TC” or treasury consolidation pools.

DeFi lending protocol builder: Opyn dApp was not compromised 

According to Monarch DeFi developer Anton Cheng, Coinbase-backed decentralized application Opyn was not compromised as rumored in chatter on crypto Twitter.

I took a look at the Ribbon hack since I might be responsible. Here's what I found so far:

1. @opyn_ wasn’t hacked; it's actually a fork from @ribbonfinance_.
2. The hack was mainly triggered by an upgraded oracle code that let anyone set prices for new assets.

This, when… https://t.co/AcF2p495OM pic.twitter.com/BH2rAvNPmP

— Anton Cheng (@antonttc) December 13, 2025

Cheng explained that the Ribbon Finance hack was facilitated by an upgraded oracle code that inadvertently allowed any user to set prices for newly added assets. He denoted that the attack began with a preparatory transaction to “set the stage” by generating poorly structured oTokens with legitimate collateral and strike assets. He continued to say that the fake tokens allowed the hacker to pick well-known underlyings like AAVE to avoid drawing attention and getting flagged. 

The hacker then set up three “subaccounts,” each depositing minimal collateral to mint all three options. All subaccounts were marked as type 0, meaning they were fully collateralized, but the absence of a maximum payout limit for each account or oToken helped the perpetrator drain assets without any restrictions.

Under Opyn’s Gamma systems, the underlying asset must match the collateral for call options and the strike for puts to keep sellers fully collateralized. If an oracle is compromised, only sellers for that specific product are meant to suffer.

Yet in this case, the combination of new oToken creation and the manipulated oracle were enough to bypass these protections.

Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.