How a $35 Million Blast Network Phishing Attack Exposes the Hidden Dangers of ERC-20 Permit Signatures

A sophisticated phishing attack on the Blast network resulted in the theft of approximately $35 million from a single crypto whale on October 11, 2024, sending shockwaves through the DeFi security community. Just days later, on October 13, another victim lost $230,000 through a similar permit-signature exploit. These incidents underscore a growing and deeply concerning trend: attackers are weaponizing a feature designed for convenience — the ERC-20 permit approval — to drain wallets without requiring victims to send a single transaction.

The Exploit Mechanics

At the heart of these attacks lies the ERC-20 permit function, an extension to the standard token interface that allows holders to approve token spending through an off-chain cryptographic signature rather than an on-chain transaction. The feature was designed to improve user experience — enabling gasless approvals and seamless DeFi interactions. However, threat actors have turned this convenience into a weapon.

Here is how the attack unfolds. The victim encounters what appears to be a legitimate DeFi protocol or airdrop claim page — often promoted through compromised social media accounts or malicious Discord/Telegram links. When the user connects their wallet and clicks to claim or interact, they are prompted to sign a message. This message is not a standard transaction; it is an EIP-2612 permit signature that grants the attacker a spending allowance on the victim tokens. Because the signature is off-chain, no gas is spent and no visible transaction appears in the wallet history. The attacker then submits the signed permit to the blockchain, transferring the victim tokens to their own address.

In the Blast network incident, the attacker used a technique involving CREATE2 addresses — pre-computed contract addresses that allow scammers to generate seemingly clean receiving addresses on the fly. This method bypasses many browser-extension blacklists and URL-based phishing detectors, making it exceptionally difficult for average users to identify the threat before it is too late.

Affected Systems

The permit-signature attack vector is not limited to Blast or any single network. Any EVM-compatible chain that supports EIP-2612 or EIP-712 typed data signatures is potentially vulnerable. This includes Ethereum mainnet, Arbitrum, Optimism, Polygon, Base, and Blast. Tokens implementing the permit function — including major stablecoins like USDC and USDT, as well as popular DeFi tokens — are all exposed.

According to CertiK H1 2024 report on blockchain security, phishing attacks were the leading cause of financial loss in the first half of the year, accounting for nearly $498 million stolen across 150 incidents. The Vanilla Drainer phishing toolkit alone has been responsible for over $5 million in thefts since its emergence in October 2024, providing phishing infrastructure to fraudsters on a commission basis of 15-20% of stolen funds.

Bitcoin was trading at approximately $62,851 at the time of these incidents, and Ethereum sat near $2,467 — prices that make large wallets particularly attractive targets for sophisticated phishing operations.

The Mitigation Strategy

Protecting against permit-signature attacks requires a multi-layered approach. First, users must understand what they are signing. Wallet interfaces should clearly distinguish between a standard transaction and a permit approval, though many do not. MetaMask and other wallets have been working with ChainPatrol and the Eth-Phishing-Detect project to flag known malicious domains, but the CREATE2 technique makes this cat-and-mouse game increasingly difficult.

Hardware wallets provide an additional layer of protection — but only if users carefully read what is being signed on the device screen. The Radiant Capital $50 million breach, which occurred around the same period, demonstrated that even hardware wallets cannot protect users who blindly sign transactions without verifying the payload. In that incident, malware on developer devices manipulated what was displayed on-screen versus what was actually being signed.

Token revocation tools are essential for post-incident damage control. Users should regularly audit their token approvals using services like Revoke.cash or Unrekt.net, revoking any unnecessary spending allowances. For DeFi power users, setting up a dedicated “burner” wallet for interacting with unverified protocols is a prudent strategy.

Lessons Learned

The $35 million Blast attack and the subsequent $230,000 loss reveal a fundamental tension in Web3: the features that make decentralized finance accessible and gasless are the same features that attackers exploit. The permit function was standardized in EIP-2612 to improve user experience, yet it has become one of the most effective attack vectors of 2024.

The pattern is clear. Phishing attacks are becoming more targeted, focusing on high-net-worth individuals — “whales” — rather than casting a wide net. Attackers research their victims, understand their portfolio composition, and craft phishing pages that mimic the specific protocols the victim is known to use. This level of sophistication demands an equally sophisticated defensive posture from users and wallet developers alike.

User Action Required

If you hold any ERC-20 tokens, take these immediate steps: audit your current token approvals and revoke any you do not actively need. Use a hardware wallet for storing significant holdings, and always verify the exact transaction details on the device screen before confirming. Never sign messages from unverified sources, even if the website looks identical to a protocol you trust. Consider using a separate wallet with limited funds for any new or experimental DeFi interactions. The cost of vigilance is measured in seconds; the cost of negligence is measured in millions.

Disclaimer: This article is for informational purposes only and does not constitute financial or security advice. Always conduct your own research before making investment or security decisions.