{"investigation":{"slug":"fantasm-finance","entity_name":"Fantasm Finance","trust_score":18,"severity_base":null,"score_modifier":0,"confidence":0.88,"status":"published","content_type":"investigation","summary":"Fantasm Finance was a fractional-algorithmic synthetic token protocol on the Fantom Opera blockchain, designed to maintain a synthetic FTM token (XFTM) backed partially by FTM collateral and partially by the protocol's native FSM token. On March 9, 2022, within days of its public launch, the protocol suffered a critical smart contract exploit that drained approximately $2.62 million from its collateral reserve pool. The attacker laundered the stolen funds through Tornado Cash and was never publicly identified; the protocol has since ceased operations with zero TVL remaining.","sections":[{"content":"Fantasm Finance operated as a fractional-algorithmic protocol on Fantom Opera, modeled after similar designs such as Frax Finance. It issued XFTM, a synthetic token pegged to the value of 1 FTM, backed by a blended collateral ratio of native FTM and the protocol's governance token FSM. Users could mint XFTM by depositing the required collateral mix, and the protocol maintained a collateral reserve pool to support redemptions. The FSM token served as a seigniorage share, absorbing volatility and theoretically capturing protocol value during periods of expansion. The protocol launched publicly in early March 2022 but was exploited within days of launch.","heading":"Protocol Overview","sources":[{"url":"https://www.coindesk.com/tech/2022/03/10/fantom-based-algo-protocol-fantasm-exploited-for-26m","name":"coindesk.com","type":"other","credibility":3},{"url":"https://medium.com/@fantasmfinance/fantasm-finance-post-mortem-exploit-09-march-2022-daf48ead016f","name":"medium.com","type":"other","credibility":3},{"url":"https://github.com/FantasmFinance/fantasm-contracts","name":"github.com","type":"other","credibility":3}],"severity":"medium"},{"content":"On March 9, 2022, at approximately 01:50:20 PM UTC, an unknown attacker exploited a critical vulnerability in Fantasm Finance's Pool contract, draining approximately $2.62 million (1,008.498875252390151 ETH) from the protocol's collateral reserve. The vulnerability resided in the mint function's input validation logic. The contract's calcMint function was intended to require a minimum quantity of FTM tokens alongside FSM collateral when minting XFTM. However, the validation code compared msg.value — the amount of ETH sent with a transaction — against the minimum FTM requirement, rather than checking the actual FTM input. Because the transactions were conducted on Fantom Opera (not Ethereum), msg.value was effectively zero for FTM transfers, meaning the check always passed regardless of FTM deposited. The attacker deployed an exploit contract (address: 0x944b58c9b3b49487005cead0ac5d71c857749e3e on Fantom) and executed a looping attack: mint large quantities of XFTM using only FSM tokens with no FTM input, sell XFTM for FTM, buy more FSM with the proceeds, and repeat. The cycle compounded gains across multiple iterations. The attack was funded via Tornado Cash on BNB Chain, with the attacker bridging assets from BNB Chain to Fantom via Celer Bridge prior to the exploit. After draining the reserves, the attacker consolidated proceeds into ETH, bridged them to Ethereum (receiving address: 0x47091E015b294B935BAbDA2d28aD44e3Ab07ae8D), and laundered the funds through Tornado Cash. Security analyst Nipun Pitimanaaree also noted that additional vulnerabilities related to Fantasm's flash-loan product may have existed at the time of the exploit.","heading":"March 2022 Smart Contract Exploit","sources":[{"url":"https://www.halborn.com/blog/post/explained-the-fantasm-finance-hack-march-2022","name":"halborn.com","type":"other","credibility":3},{"url":"https://www.certik.com/resources/blog/5p92144WQ44Ytm1AL4Jt9X-fantasm-finance","name":"certik.com","type":"other","credibility":3},{"url":"https://medium.com/@fantasmfinance/fantasm-finance-post-mortem-exploit-09-march-2022-daf48ead016f","name":"medium.com","type":"other","credibility":3},{"url":"https://www.quadrigainitiative.com/casestudy/fantasmfinancecontractvulnerabilities.php","name":"quadrigainitiative.com","type":"other","credibility":3},{"url":"https://www.coindesk.com/tech/2022/03/10/fantom-based-algo-protocol-fantasm-exploited-for-26m","name":"coindesk.com","type":"other","credibility":3}],"severity":"medium"},{"content":"In the 24 hours following the public disclosure of the exploit, the XFTM token lost approximately 98% of its value, falling from roughly $1.82 to approximately $0.027. The FSM governance token suffered heavy losses as well. Immediately after the exploit was announced, the Fantasm Finance team publicly urged all users to redeem their XFTM holdings and exit liquidity pools. The token has not recovered and currently shows no market activity.","heading":"Token Price Impact","sources":[{"url":"https://u.today/fantoms-defi-fantasm-finance-fsm-exploited-26-million-lost","name":"u.today","type":"other","credibility":3},{"url":"https://beincrypto.com/fantasm-finance-loses-2-6-million-defi-exploit/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/fantasm-xftm/","name":"coinmarketcap.com","type":"other","credibility":3}],"severity":"medium"},{"content":"Following the exploit, the Fantasm Finance team published a post-mortem on March 10, 2022. The team acknowledged the vulnerability, halted FSM farming and XFTM minting permanently, and took a snapshot of XFTM holdings at block height 32970600 on Fantom Opera. The team conducted a 'white hack' of the remaining protocol reserves, recovering 935,415 FTM, which was distributed to XFTM holders proportionally based on the snapshot. An additional 174,327.763 FTM in accumulated protocol fees was distributed to FSM stakers and lockers beginning March 11, 2022 at 9:00 AM UTC. The team offered the attacker a 10% bug bounty on recovered funds in exchange for returning the remainder; no funds were returned. The team subsequently announced plans to relaunch the protocol with a new token and DAO governance structure, airdropping the new token to FSM holders, liquidity providers, stakers, and lockers. The protocol was never meaningfully relaunched; DefiLlama records $0 in total value locked as of 2024–2025.","heading":"Team Response and Compensation","sources":[{"url":"https://medium.com/@fantasmfinance/fantasm-finance-post-mortem-exploit-09-march-2022-daf48ead016f","name":"medium.com","type":"other","credibility":3},{"url":"https://www.quadrigainitiative.com/casestudy/fantasmfinancecontractvulnerabilities.php","name":"quadrigainitiative.com","type":"other","credibility":3},{"url":"https://defillama.com/protocol/fantasm","name":"defillama.com","type":"other","credibility":3}],"severity":"medium"},{"content":"The exploit resulted from a logic error in input validation that caused the mint function to accept XFTM minting requests with zero FTM collateral. The protocol launched in early March 2022 and was exploited within days of going live, raising questions about the adequacy of pre-launch security review. CoinDesk reporting noted that Nipun Pitimanaaree flagged additional potential vulnerabilities related to the flash-loan product at the time of the incident. No pre-launch audit report has been publicly confirmed for the exploited Pool contract. The GitHub repository for Fantasm's contracts is publicly available, but no audit attestation is referenced in available public sources for the specific contracts exploited.","heading":"Security and Audit Posture","sources":[{"url":"https://www.halborn.com/blog/post/explained-the-fantasm-finance-hack-march-2022","name":"halborn.com","type":"other","credibility":3},{"url":"https://www.coindesk.com/tech/2022/03/10/fantom-based-algo-protocol-fantasm-exploited-for-26m","name":"coindesk.com","type":"other","credibility":3},{"url":"https://github.com/FantasmFinance/fantasm-contracts","name":"github.com","type":"other","credibility":3}],"severity":"medium"},{"content":"The attacker funded the exploit operation by withdrawing funds from Tornado Cash on BNB Chain. One of the two identified preparatory addresses was created on the same day as the attack and received 2.3 BNB from a Binance hot wallet. Funds were converted to USDC via PancakeSwap, bridged to Fantom via Celer Bridge, used to execute the exploit, then consolidated into ETH and bridged back to Ethereum. The final proceeds — approximately 1,008 ETH — were routed through Tornado Cash on Ethereum. The use of Tornado Cash for both funding and laundering the attack is consistent with patterns typical of sophisticated or premeditated exploits. No on-chain attribution to a named individual or group has been publicly established.","heading":"Fund Flow and Mixer Usage","sources":[{"url":"https://www.certik.com/resources/blog/5p92144WQ44Ytm1AL4Jt9X-fantasm-finance","name":"certik.com","type":"other","credibility":3},{"url":"https://medium.com/@fantasmfinance/fantasm-finance-post-mortem-exploit-09-march-2022-daf48ead016f","name":"medium.com","type":"other","credibility":3},{"url":"https://www.quadrigainitiative.com/casestudy/fantasmfinancecontractvulnerabilities.php","name":"quadrigainitiative.com","type":"other","credibility":3}],"severity":"medium"},{"content":"Fantasm Finance is effectively defunct. DefiLlama records zero total value locked in the protocol. The official Twitter/X account (@fantasm_finance) has shown no substantive activity since mid-2022. The relaunch under a new token and DAO structure that was announced in the post-mortem does not appear to have resulted in a live, active protocol. The XFTM token retains a CoinMarketCap listing but shows negligible market activity. No regulatory actions, law enforcement referrals, or named responsible parties have been publicly identified in connection with the exploit.","heading":"Current Protocol Status","sources":[{"url":"https://defillama.com/protocol/fantasm","name":"defillama.com","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/fantasm-xftm/","name":"coinmarketcap.com","type":"other","credibility":3},{"url":"https://x.com/fantasm_finance","name":"x.com","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2022-03","event":"Fantasm Finance launches publicly on Fantom Opera, offering XFTM synthetic token minting backed by FTM and FSM collateral.","source":"","date_original":"2022-03-01"},{"date":"2022-03-09","event":"Exploit executed at approximately 01:50 PM UTC. Attacker drains approximately $2.62 million (1,008 ETH) from the protocol collateral reserve by exploiting a mint function input validation flaw, allowing XFTM minting with zero FTM collateral.","source":""},{"date":"2022-03-09","event":"Fantasm team announces the breach publicly, urges all users to redeem XFTM and exit liquidity pools immediately. XFTM token falls 98% within 24 hours.","source":""},{"date":"2022-03-09","event":"Team executes a white-hack of remaining protocol reserves, recovering 935,415 FTM for distribution to affected XFTM holders.","source":""},{"date":"2022-03-10","event":"Fantasm Finance publishes official post-mortem detailing the vulnerability, attack flow, attacker addresses, and compensation plan.","source":""},{"date":"2022-03-11","event":"Distribution of 174,327.763 FTM in accumulated protocol fees to FSM stakers and lockers begins at 9:00 AM UTC.","source":""},{"date":"2022-03-18","event":"White-hacked FTM funds distributed to XFTM holders via snapshot at block height 32970600.","source":""},{"date":"2022-03-25","event":"Protocol announces planned collateral ratio adjustments and relaunch plans with new token and DAO governance.","source":""},{"date":"2022-06","event":"Protocol activity ceases. No meaningful relaunch occurs. TVL trends to zero.","source":"","date_original":"2022-06-01"}],"sources_used":[{"url":"https://medium.com/@fantasmfinance/fantasm-finance-post-mortem-exploit-09-march-2022-daf48ead016f","name":"Fantasm Finance Post Mortem: Exploit 09 March 2022 (Medium/Official)","type":"official","archive_url":null,"credibility":2,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.coindesk.com/tech/2022/03/10/fantom-based-algo-protocol-fantasm-exploited-for-26m","name":"Fantom-Based Algo Protocol Fantasm Exploited for $2.6M (CoinDesk)","type":"news_article","archive_url":"https://web.archive.org/web/20260724183722/https://www.coindesk.com/tech/2022/03/10/fantom-based-algo-protocol-fantasm-exploited-for-26m","credibility":1,"archive_timestamp":"2026-07-24T18:37:22+00:00"},{"url":"https://www.halborn.com/blog/post/explained-the-fantasm-finance-hack-march-2022","name":"Explained: The Fantasm Finance Hack — March 2022 (Halborn)","type":"research","archive_url":"http://web.archive.org/web/20260121034133/https://www.halborn.com/blog/post/explained-the-fantasm-finance-hack-march-2022","credibility":2,"archive_timestamp":"2026-01-21T03:41:33+00:00"},{"url":"https://www.certik.com/resources/blog/5p92144WQ44Ytm1AL4Jt9X-fantasm-finance","name":"CertiK — Fantasm Finance Exploit Analysis","type":"research","archive_url":"https://web.archive.org/web/20260725085559/https://www.certik.com/blog/5p92144WQ44Ytm1AL4Jt9X-fantasm-finance","credibility":2,"archive_timestamp":"2026-07-25T08:55:59+00:00"},{"url":"https://www.quadrigainitiative.com/casestudy/fantasmfinancecontractvulnerabilities.php","name":"Mar 2022 — Fantasm Finance Contract Vulnerabilities $2.626M (Quadriga Initiative)","type":"research","archive_url":"https://web.archive.org/web/20260724184708/https://www.quadrigainitiative.com/casestudy/fantasmfinancecontractvulnerabilities.php","credibility":2,"archive_timestamp":"2026-07-24T18:47:08+00:00"},{"url":"https://beincrypto.com/fantasm-finance-loses-2-6-million-defi-exploit/","name":"Fantasm Finance Loses $2.6 Million in DeFi Exploit (BeInCrypto)","type":"news_article","archive_url":null,"credibility":2,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://u.today/fantoms-defi-fantasm-finance-fsm-exploited-26-million-lost","name":"Fantom's DeFi Fantasm Finance Exploited; $2.6 Million Lost (U.Today)","type":"news_article","archive_url":"http://web.archive.org/web/20250906215114/https://u.today/fantoms-defi-fantasm-finance-fsm-exploited-26-million-lost","credibility":2,"archive_timestamp":"2025-09-06T21:51:14+00:00"},{"url":"https://defillama.com/protocol/fantasm","name":"Fantasm — DefiLlama Protocol Page (TVL data)","type":"on_chain","archive_url":"http://web.archive.org/web/20251005182156/https://defillama.com/protocol/fantasm","credibility":2,"archive_timestamp":"2025-10-05T18:21:56+00:00"},{"url":"https://github.com/FantasmFinance/fantasm-contracts","name":"FantasmFinance/fantasm-contracts — GitHub","type":"official","archive_url":"http://web.archive.org/web/20260128020629/https://github.com/FantasmFinance/fantasm-contracts","credibility":2,"archive_timestamp":"2026-01-28T02:06:29+00:00"},{"url":"https://coinmarketcap.com/currencies/fantasm-xftm/","name":"XFTM Token — CoinMarketCap","type":"other","archive_url":"https://web.archive.org/web/20260725035423/https://coinmarketcap.com/currencies/fantasm-xftm/","credibility":2,"archive_timestamp":"2026-07-25T03:54:23+00:00"}],"source_tags":["defillama"],"addresses":[],"reviewed":false,"reviewed_by":null,"model_used":"claude-sonnet-4-6","created_at":"2026-05-04T02:54:51.002263+00:00","updated_at":"2026-08-29T01:35:35.74+00:00"}}