Over $100 Million Stolen From DeFi Protocal Mango Markets

Defi protocol Mango Markets is the latest crypto project to be hacked for $100 million due to an error. Mango Markest announced via Twitter, stating that the malicious actor was able to access the funds through an oracle price manipulation.

This is the second Defi protocol in a week where $100 million was stolen, as last Thursday, the Binance Smart Chain was halted after being drained of millions in user's funds.

The attacker temporarily inflated the price of their collateral and then took loans from the Mango treasury, according to blockchain auditing company OtterSec.

Mango is a decentralized crypto exchange (DEX) built on the Solana blockchain that allows users to take loans and execute spot trades. Its self-governed Mango DAO runs Mango Markets.

Mango confirmed the exploit in a Tweet on Tuesday, stating that it was "investigating an incident where a hacker was able to drain funds from Mango via an oracle price manipulation."

"At 6:19 PM ET, an attacker funded account A with 5mm USDC collateral," the Head of Derivatives at Genesis Global Trading, Joshua Lim, tweeted.

Lim explained that the hacker then went on to offer out 483 million units of MNGO perps (perpetual contracts) on the Mango Markets order book. Then, at 6:24 PM ET, they would fund another account with 5 million USDC collateral to buy their own 483 million MNGO perps for $0.03 per unit.

At 6:26 PM ET, the attacker began to move the Mango spot price market, driving the price to $0.91 and the value of their 483 million MNGO to $423 million.

Finally, the malicious actor took a $116 million loan, leaving the balance at negative -116.7 million. In response, Mango Markets were forced to stop all deposits and started the process of freezing the third-party funds. Mango said it was "taking steps to have third parties freeze funds in flight" and "disabling deposits on the front end as a precaution."

This story is ongoing but continues the narrative that Defi protocols are risky investments. While some tout the virtues of self-governance, stories like these reinforce people's preconceived notions of the space.