An attacker exploited Edel Finance, a credit protocol, by manipulating the price feed for wGOOGLx, a wrapped version of tokenized Google stock. The malicious actor artificially inflated the collateral value of the wrapped token to approximately 78 times its actual price, enabling a profitable attack on the lending mechanism.
Using the artificially inflated collateral, the attacker borrowed real assets against worthless valuations, leaving the protocol with approximately $403,000 in bad debt. Critically, the underlying price of actual Google shares remained unchanged—the vulnerability existed solely within Edel Finance's token wrapping mechanism, which converts tokenized stocks between standard and wrapped versions.
Edel Finance immediately froze the affected protocol version and committed to covering user losses while developing enhanced security measures for a replacement system. The incident underscores ongoing risks in DeFi lending protocols that integrate tokenized traditional assets, particularly when conversion mechanisms lack sufficient safeguards against price manipulation.