security
Moonwell Loses $8.7 Million Due to MAMO Price Manipulation on Base
The Moonwell lending protocol suffered an $8.7 million loss after an attacker manipulated the price of the MAMO token on the Base network, leading to a protocol shutdown.
AS1 NewsSource: thedefiant.io
On Thursday, Moonwell, a decentralized lending protocol, experienced a substantial financial loss of approximately $8.7 million due to a price manipulation attack involving the MAMO token. MAMO is a small-cap token accepted as collateral on the Base network by Moonwell. The attacker inflated MAMO's price, enabling them to borrow against the artificially increased collateral value.
In response to the manipulation, Moonwell took immediate action by reducing borrow caps on all core markets to 1 wei, effectively halting further borrowing activity. The protocol then decided to shut down temporarily to prevent further losses and assess the situation.
This incident highlights vulnerabilities in DeFi protocols that accept low-liquidity tokens as collateral, especially on emerging networks like Base. The attack underscores the importance of robust price oracles and risk management strategies to mitigate manipulation risks.
As of now, there is no indication of further exploits or ongoing attacks related to this event. The protocol's response aims to protect user funds and restore stability before resuming operations.
The attack resulted in significant financial loss and prompted protocol shutdown, illustrating risks associated with low-liquidity collateral tokens.