Elevated risk — historic $37.5M exploit and high-leverage mechanics create substantial risk, partially offset by post-exploit code remediation and audits.
Top Risks
1
The protocol suffered a $37.5M exploit in February 2021 via a complex flash loan attack that exploited missing input checks and rounding errors in Iron Bank integration — the codebase has since been patched and re-audited but the same core architecture remains.
2
Leveraged yield farming up to 9x amplifies liquidation risk during volatile markets; oracle delays on underlying LP token pricing can cause cascading liquidations across leveraged positions.
3
Dependency on external DEX protocols (Curve, Balancer, SushiSwap, Uniswap) for underlying yield strategies means vulnerabilities in those protocols directly affect Homora users.
4
Custom spell system allows users to execute complex leveraged strategies in a single transaction, increasing smart contract attack surface beyond standard lending protocols.
Risk Breakdown
Frequently Asked Questions
Is Homora V2 safe to use?
Homora V2 receives a C+ risk grade (40/100) from Hindenrank, where lower scores indicate lower risk. Elevated risk — historic $37.5M exploit and high-leverage mechanics create substantial risk, partially offset by post-exploit code remediation and audits. Homora V2 is a leveraged yield farming protocol allowing up to 9x leverage on DEX liquidity positions, with $110M TVL across Ethereum, Avalanche, and other chains. Its C+ grade reflects the February 2021 $37.5M exploit (patched and re-audited), high leverage amplifying liquidation risk, and the custom spell system that expands smart contract attack surface beyond standard lending protocols.
What are the main risks of using Homora V2?
The key risks identified for Homora V2 are: (1) Homora V2 was exploited for $37.5M in February 2021 through a flash loan attack. While the vulnerability was patched and the code re-audited, the incident demonstrates the protocol's complex attack surface. (2) Users can take up to 9x leveraged positions on yield farming strategies. This means small price drops can lead to rapid liquidation of positions, and during volatile markets, cascading liquidations can occur. (3) The protocol depends on external DEX protocols like Curve, Uniswap, and SushiSwap for underlying yield. If any of these protocols experience issues, Homora users with leveraged positions face amplified losses.
What is Homora V2's risk score breakdown?
Homora V2 scores 40/100 across eight risk dimensions: Mechanism Novelty: 3/15, Interaction Severity: 8/20, Oracle Surface: 5/10, Documentation Gaps: 4/10, Track Record: 9/15, Scale Exposure: 5/10, Regulatory Risk: 4/10, Vitality Risk: 2/10. The highest risk area is Track Record at 9/15.
How does Homora V2 compare to other DeFi protocols?
Among 68 rated DeFi protocols on Hindenrank, Homora V2 ranks #47 by safety (lowest risk score = safest). Its 40/100 risk score and C+ grade place it among the riskier DeFi protocols.
Has Homora V2 ever been hacked or exploited?
Homora V2 scores 9/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.