Yearn Finance Faces $9 Million Breach: Attackers Create Infinite yETH Tokens

Yearn Finance has revealed that one of its older yETH products was compromised in an exploit that enabled attackers to create an overwhelming amount of counterfeit tokens, which they subsequently swapped for real assets.

Key Takeaways

Yearn Finance's legacy yETH product suffered a security breach, leading to $9 million in losses.
The attacker minted nearly infinite yETH tokens in one transaction, draining liquidity pools swiftly.
Approximately $8 million was drawn from the main yETH stable-swap pool, along with 1,000 ETH worth around $3 million, which was sent to Tornado Cash to hide the attacker's tracks.
The breach was contained to an older yETH version, and Yearn’s more recent V2 and V3 vaults remain secure.
Ongoing investigations are being conducted to assess the breach and recover stolen funds.

Yearn Finance

On November 30, 2025, alerts from on-chain data and official statements indicated that the attacker generated a nearly limitless supply of yETH in a single transaction, and then utilized these tokens to extract ETH and liquid-staking derivatives from various liquidity pools. The total financial impact of this breach has been assessed at approximately $9 million.

How Did the Breach Occur?

Reports indicate that the attacker exploited a flaw within the yETH token minting process, successfully generating around 235 trillion tokens in a single move. These worthless tokens were then exchanged for actual assets from Balancer and Curve pools linked to the product, which drained the liquidity within minutes. Monitoring tools and security experts observed this minting and subsequent token swaps happening rapidly on the blockchain.

"At 21:11 UTC on Nov 30, an incident transpired involving the yETH stable-swap pool which led to the minting of a substantial amount of yETH. The contract affected is a customized version of popular stableswap code, and it is unrelated to other Yearn products. Fortunately, Yearn’s V2 and V3 vaults are secure," stated Yearn Finance.

Which Assets Were Compromised?

Details reveal that around $8 million was withdrawn from the primary yETH stable-swap pool, while about $0.9 million was taken from a yETH–WETH pool. Additionally, nearly 1,000 ETH—valued at about $3 million at the time—was transferred to Tornado Cash in an apparent attempt to hide the attacker's activities. The attacker converted the counterfeit yETH into a combination of ETH and liquid staking tokens before trying to launder the stolen funds.

Total crypto market cap currently at $2.92 trillion. Chart: TradingView

According to Yearn representatives and subsequent reports, this security breach was confined to an older implementation of the yETH product and did not compromise Yearn’s recently launched V2 and V3 vaults. The team took immediate action to isolate deposits into the affected pool while collaboration with external experts commenced to investigate the incident further. This isolation was effective in protecting most user funds in active vaults from being affected.

Following the news of the breach, the crypto market experienced a wave of selling as traders began to assess the risks associated with mixing liquid-staking tokens and custom swap code. Yearn Finance is working alongside external security teams to conduct a thorough analysis and fix the underlying vulnerability. Various teams involved in the ongoing evaluation include external auditors and blockchain investigators tracking the stolen funds and advising on potential recovery solutions.

The protocol has issued warnings to users regarding the impacted legacy product and has advised caution while the situation is reviewed.

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