Mango Markets, a Solana blockchain-based decentralized trading platform, appears to be the most recent target of a crypto hack. Just days after the Binance bridge hack, another incident in the crypto DeFi sector arose on October 12.
Mango Markets Hack
MM is a Solana-based platform for trading digital assets on the Solana blockchain on spot margin and perpetual futures. Mango DAO manages Mango Markets. Hackers struck once more, stealing approximately $117 million from Mango Markets, decentralized finance (DeFi) trading platform on the Solana blockchain.
We are currently investigating an incident where a hacker was able to drain funds from Mango via an oracle price manipulation.
We are taking steps to have third parties freeze funds in flight. 1/
— Mango (@mangomarkets) October 11, 2022
Mango announced on Twitter on the evening of October 11 that there had been “an incident” involving a hacker draining funds. Mango Market tweeted on October 12 that the hack was caused by price manipulation on the native MNGO token. The platform’s management stated they were investigating the source of the exploit.
Around 22:00 UTC October 11th the protocol had an incident involving the following:
-2 accounts funded with USDC took an outsized position in MNGO-PERP
-Underlying MNGO/USD prices on various exchanges (FTX, Ascendex) experienced a 5-10x price increase in a matter of minutes
— Mango (@mangomarkets) October 12, 2022
In a tweet, Mango Markets stated that it was blocking front-end deposits. Furthermore, the team has asked that users refrain from making deposits until the situation is resolved. Moreover, Mango Markets offered the attacker the opportunity to receive a bug bounty in exchange for reclaiming the stolen funds.
How Did the Hack Occur?
According to OtterSec, a blockchain security audit, the hacker allegedly manipulated the price of the native token Mango (MNGO) collateral, depleting the platform of significant loans. Following that, the hacker borrowed $116 million, resulting in a net loss of 116.7 million for Mango’s treasury.
According to Joshua Lim, Genesis’ head of derivatives, the hacker carried out the hack using two accounts, going short on one and hedging his position on the other.
1/ this is how I think the mango attack played out, please let me know if I got anything wrong:
— Joshua Lim (@joshua_j_lim) October 12, 2022
The hacker placed a 5 million USD Coin (USDC) into the network before initiating an unusually long position. He bought 438 million Mango tokens, making an unrealized profit of $420 million.
The collateral value of the hacker’s account increased by nearly 1,000% as the price of MNGO increased. He eventually destroyed the protocol by stealing $116 million in liquidity from all available tokens.
DeFi Hacks Hurt Market Sentiment
Smart Contracts are used to carry out transactions in DeFi trading systems. Because there is no involvement from a third party, hackers exploit the vulnerability to exploit the network and steal money from it.
Moreover, It would be impossible to manipulate cryptocurrency prices on a centralized market, as hackers did with the Mango token. This is because whenever a trader makes a large offer on one item, its price rises across the market.
As a result, making a significant profit right away is impossible. Thus, It has raised numerous concerns about the crypto markets and decentralized finance.
.@BNBchain is currently under maintenance.
We will suspend all deposits and withdrawals via BNB chain temporarily until there are further updates.
We apologise for the inconvenience. Thank you for your patience!
— Binance (@binance) October 6, 2022
Negative market sentiment could be triggered by major crypto attacks that occurred back-to-back. Last week, the Binance Smart Chain (BSC) network was subjected to an exploit on the BSC Token Hub, a cross-chain bridge. OtterSec believed that hacks had a significant impact on the community.
Mango markets experienced approximately 4,000 short liquidations due to the price increase. Furthermore, the price of SOL fell by 2.30% following the exploit before making a minor comeback. Due to the price decline, SOL nearly reached a low level.
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