The El Dorado Exchange (EDE) Finance project on Arbitrum was hacked, resulting in a loss of $520,000. The attacker manipulated token prices by exploiting vulnerabilities in the oracle contract. Lunaray Sec, the auditing team, confirmed that the vulnerabilities were not within the scope of their initial audit. EDE Finance has rectified the vulnerabilities, emphasizing the need for comprehensive smart contract audits to protect decentralized finance ecosystems.