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The Dencun attack on SIR.trading exposed Ethereum Dencun upgrade vulnerabilities, disrupting DeFi. After releasing this protocol update, the attack preyed on the opportunity. It emptied SIR.trading’s entire $355,000 TVL.
It is one of the first recorded events exposing transient storage vulnerabilities. Read on to understand this better. The Dencun attack raises concerns about the security of DeFi protocols using Ethereum’s new functionality.
How the Hack Happened
TenArmorAlert and Decurity were the first to raise the alarm, warning users that the protocol had been completely drained. Xatarrer, the founder of SIR.trading, said it is the most unfortunate news for a protocol. He promised users that the company would continue functioning despite the loss.
TenArmor Security Alert
Our system has detected a suspicious attack involving #SIR.trading @leveragesir on #ETH, resulting in an approximately loss of $353.8K.
The stolen funds have been deposited into RailGun.
Attack transaction: https://t.co/W5SRnzKjDF… pic.twitter.com/e1OOQoKbhz
— TenArmorAlert (@TenArmorAlert) March 30, 2025
So, what went wrong? An attacker exploited a vulnerability in SIR.trading’s Vault, which uses Ethereum’s transient storage. Through this method, the hacker gained control over the callback function of the Uniswap pool.
The hacker accessed Uniswap pool systems and altered their address reference to steal funds from the system. The hackers removed all TVL deposits from the protocol through malicious function calls.
The root cause lies in the transient storage collision in the uniswapV3SwapCallback function, which uses slot 1 both for the Uniswap pool address and the minted token amount.
The attacker initialized a malicious vault and manipulated the minted amount to exactly equal a… pic.twitter.com/198A5Wrsbq
— TenArmorAlert (@TenArmorAlert) March 30, 2025
Why This Dencun Attack Is a Big Deal
Yi claims this is the first known transient storage exploit. The Dencun upgrade introduced a new gas-fee reduction functionality, which enabled the attack. The industry remains unfamiliar with this stage’s unproven transient storage mechanism.
.@leveragesir got hacked just now for $354k due a clever exploit targeting transient storage in a Vault contract’s uniswapV3SwapCallback. I think this is a groundbreaking case—How did it happen? What was the root cause? Now disappear into the darkness.
https://t.co/WBQDRHGzWl
— Yi (@SuplabsYi) March 30, 2025
Where Did the Funds Go?
The security team at TenArmorSecurity found that the hacker transferred the stolen funds to Railgun, an Ethereum-based privacy solution for crypto transactions. Tracking the stolen assets is a bit difficult due to money transfers, which made the detection process much more challenging.
The Xatarrer company reached out to Railgun after discovering the funds were missing. His first step was to track down the missing money. Railgun’s security-first model creates problems for investigators. It makes it difficult for them to receive workable cooperation from authorities.
So we go the worst news a protocol could received and got hacked for our entire TVL ($355k).
I (@Xatarrer) would like to not throw the towel here as I truly believe in SIR.
If you also believe in the core protocol and have any idea on how to proceed forward, please DM. https://t.co/FD6QxwfXP4
— SIR.trading (
^
) (@leveragesir) March 30, 2025
Conclusion
The Dencun attack serves as an essential warning to all crypto enthusiasts. Ethereum’s Dencun update introduces several features that provide value to users. However, the implemented functionalities may also introduce unforeseen security vulnerabilities. These vulnerabilities could expose DeFi protocols to new risks, emphasizing the need for more testing. Security experts will watch potential exploit points to prevent future incidents.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted levels of risk tolerance of the writer/reviewers, and their risk tolerance may be different from yours. We are not responsible for any losses that you may incur as a result of any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
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