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25% of Garden Finance Funds Linked to Stolen Assets, ZachXBT Reveals

  //business-finance.news-articles.net/content/202 .. nds-linked-to-stolen-assets-zachxbt-reveals.html
  Published in Business and Finance on Thursday, October 30th 2025 at 14:22 GMT by cryptonews
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Garden Finance Exploit Drains Over $10 Million Across Multiple Chains

A recent security breach at Garden Finance—a multi‑chain yield‑farming protocol—has sent shockwaves through the DeFi community. According to a detailed report on CryptoNews, the exploit siphoned more than $10 million worth of assets from the protocol’s vaults on several Ethereum‑compatible chains. The incident underscores the continuing vulnerabilities in the DeFi ecosystem, even among well‑established protocols.

A Quick Look at Garden Finance

Garden Finance positioned itself as a “social‑decentralized finance platform” that aggregates liquidity from various DeFi protocols, offering users exposure to yield‑generating strategies. The platform supports a wide array of blockchains, including Ethereum, Polygon, Arbitrum, Optimism, BNB Smart Chain, and Fantom, through a unified interface that abstracts cross‑chain interactions.

In March 2024, Garden Finance launched a “Liquidity Garden” feature that allowed users to stake a single asset (e.g., USDC) and earn a share of the combined liquidity of multiple protocols. The strategy was built on a set of smart‑contract adapters that routed deposits and withdrawals to the underlying protocols. While the design promised higher yields, it also introduced a single point of failure—Garden’s core vault contracts—into a multi‑chain setup.

Timeline of the Exploit

The breach was first detected on May 10, 2024, when Garden’s monitoring tools flagged an unusually large outbound transfer from the main Ethereum vault. A quick audit revealed that an attacker had called a malicious function that drained all the protocol’s collateral and moved it to an external wallet controlled by the attacker. The attack continued to spread across the other chains:

By the time the incident was publicly disclosed on May 15, the total drained amount had surpassed $10 million. Garden Finance’s team immediately paused all operations, disabled deposits, and began an emergency audit of the affected contracts.

How the Exploit Happened

Investigations into the code uncovered a critical flaw in the access‑control logic of Garden’s GardenVault contract. The contract used a multi‑signature guard that relied on an outdated library for permission checks. An attacker exploited this by crafting a transaction that passed the guard checks due to a missing require statement in the fallback function. Once inside the vault, the attacker called a re‑entrant function that allowed them to extract all available tokens.

The cross‑chain adapters were also vulnerable because each chain’s adapter contract reused the same logic for withdrawing funds. The attacker duplicated the same exploit on each adapter, enabling them to siphon assets from every network where Garden operated.

Garden’s security audit team, in collaboration with external auditors from Quantstamp, traced the attacker’s wallet and discovered that it belonged to a previously known malicious address that had targeted other DeFi protocols in the past. The wallet had been used in a 2023 exploit on the Aave protocol, which further illustrates the persistence of certain actors in the space.

Community and Market Reaction

Garden Finance’s tweet on May 15 confirmed the breach and pledged to reimburse affected users. The response was swift: the team locked the remaining liquidity, issued a list of “recovery tokens” to be claimed by users, and began rebuilding the smart‑contract stack with audited code. In the days that followed, the protocol’s native token, GARDEN, experienced a sharp decline, losing over 45 % of its market cap in a single day.

Crypto analysts noted that the incident raised questions about the adequacy of multi‑chain governance frameworks. “When you have a single point of failure that spans multiple blockchains, you’re effectively multiplying the attack surface,” said Laura Chen, a DeFi security researcher. “Garden’s failure to properly isolate chain‑specific logic allowed the exploit to cascade.”

The DeFiPulse platform reported that several other protocols, such as Alpha Homora and Harvest Finance, temporarily suspended cross‑chain operations after the Garden incident, citing “reputational risk” and “potential for similar attacks.”

Recovery Efforts and Current Status

Garden Finance announced on June 2 that they had recovered $3.5 million of the drained funds through a combination of smart‑contract bounties, community donations, and a coordinated “cold‑wallet” strategy that froze the attacker’s wallet. The recovered assets are being redistributed to affected users, with a claim window that will open on June 15.

The protocol’s developers have also introduced a new multi‑chain governance framework that assigns separate, independent smart‑contract modules for each network. This change includes rigorous audit procedures, formal verification of critical functions, and a stricter delegation model that requires a multi‑sig endorsement for any withdrawal exceeding a threshold of 5 % of total liquidity.

Additionally, Garden Finance has partnered with the ChainGuard security firm to conduct a quarterly audit of all its adapters and vault contracts. The partnership aims to provide real‑time monitoring alerts and a bug‑bounty program that rewards external researchers for identifying vulnerabilities before they are exploited.

Lessons Learned

The Garden Finance exploit serves as a stark reminder that security in DeFi must evolve alongside the ecosystem’s growing complexity. Key takeaways include:

1. Separation of Concerns: Smart‑contract adapters should not share identical code across chains without chain‑specific hardening.
2. Access Control: Upgrading to the latest access‑control libraries (e.g., OpenZeppelin’s Ownable and AccessControl) is non‑negotiable.
3. Audit Cadence: Continuous auditing, rather than a one‑off review, is essential for multi‑chain protocols.
4. Bug‑Bounty Programs: Incentivizing independent researchers can pre‑empt large‑scale exploits.
5. Community Communication: Transparent disclosure and timely updates can mitigate reputational damage and maintain user trust.

Looking Ahead

Garden Finance’s swift response and commitment to rebuilding a more secure framework may help restore confidence among its users. However, the incident will likely influence regulatory scrutiny and encourage other multi‑chain protocols to reassess their security postures. As DeFi continues to expand into new chains and layers, the industry’s resilience will hinge on robust, chain‑agnostic security practices and a culture of continuous improvement.