Flow exploit leaves NFT loan borrowers ‘in limbo’ after network pause

An exploit on the Flow blockchain on December 27th disrupted the ecosystem, particularly impacting NFT-backed loans. While the Flow Foundation stated user balances were unaffected, the network pause of the Cadence execution environment hindered borrowers from repaying maturing loans. Flowty, a Flow-based NFT lending platform, reported 11 loans matured during the pause, resulting in eight defaults and two settlement failures. Despite the network’s restoration, token swapping remains limited, preventing borrowers from acquiring assets for repayment. Flowty has paused all loan settlements, placing loans in 'limbo' until ecosystem functionality stabilizes, aiming to avoid forced defaults and NFT loss. New loan listings have been disabled, and the FLOW token price has significantly declined, dropping roughly 40% initially and a further 17% to $0.086.

(Source：The Block)