In a tweet on Tuesday evening, Mango Markets confirmed that a hacker was effectively able to manipulate the oracle-based network to significantly drive up the reflected collateral value of a proposed loan. After doing so, the unidentified individual was then able to remove over $100 million in liquidity from the platform after exercising the inflated loans.
The blockchain auditing and security firm, OtterSec discovered the breach and reported details of how the hacker was able to gain the funds from the Mango Treasury. OtterSec was the first to report news of the breach and continued to provide updated information as other points became clear, on their official Twitter feed.
Hacker Makes Proposal To Mango Markets After Exploit
Mango Markets is a decentralized finance platform on the Solana blockchain. Mango offers its users access to cryptocurrency spot, margin and perpetual futures trading. As part of the Mango Markets community infrastructure, a DAO (decentralized autonomous organization) makes decisions on proposals and issues that may arise concerning the future state of the platform. Its native token – MNGO, the same token stolen in the attack, is used to take part in the governance process.
In what could be seen as a surprising move, the hacker submitted a proposal to the DAO community using the stolen funds. In details of the proposal, the hacker claims that they will return most of the stolen money if the community agrees to pay bad debt taken from a June operation which was structured to save a Solana project called Solend. In the proposal, the hacker stipulates that users without bad debt losses be covered and that any bad debt be paid in a bug bounty and insurance. That amount, totalling around $70 million in USDC, is proposed to be sent to the unidentified individual from the community treasury.
Further Details Of Bizarre Proposal
The hacker added other conditions to the proposal which accompanied the main points and objectives already disclosed. The individual responsible for the theft also asks that users who vote in favour of the proposal agree to pay the bounty, pay off the bad debt with funds in the treasury, waive any future claims against accounts with negative debt, agree not to freeze funds, and agree not to invoke any criminal investigation.
After making the proposal to the DAO, the hacker then casted 33 million votes in favour of their own proposal. While it is at a 99.9% approval at the time of writing, the proposal still needs an additional 67 million votes before this Friday in order to confirm the event as quorate, and reach an official “yes” vote. Moreover, initial estimates for the total value of a portion of the stolen assets are believed to potentially be lower than what was first reported immediately following the hack. The final numbers remain to be determined.
Hacks Across The Blockchain Community
Over recent weeks and months, there have been several massive exploits that have affected multiple cryptocurrency-based blockchain platforms. The most recent breach prior to this news of Mango Markets affected the Binance platform. Binance’s BSC token hub was exploited only a week prior, on Thursday, October 6.
In the Binance breach, a hacker was able to manipulate the token hub and withdraw 1,000,000 BNB tokens, before depositing the funds into the DeFi protocol Venus, and taking out loans in stablecoin for around $150 million USD in total value. The breach led to a temporary suspension of deposits and withdrawals to and from the network, as the Binance team dealt with the attack head-on. The team was reportedly able to freeze $7 million of the funds before they were all removed from the platform.
More Details To Follow
With news of the hack on Mango Markets still developing, the team, its DAO, and the collective cryptocurrency community are staying tuned in for information as it is released. The majority of 2022 has been difficult in many aspects, for the greater cryptocurrency market. While all markets have suffered from a significant amount of bearish sentiment, news of bankruptcies, hacks, network breaches, regulatory questions, concerns and declining prices, have been all but too frequent throughout the year for crypto specifically.
The total crypto market cap has struggled to cross back over the trillion dollar mark again once and for all. The combined market capitalization fell under the $1 trillion dollar mark back in June for the first time since January 2021.
Q4 is a time when traditionally Bitcoin, the industry leader, does exceptionally well, so many crypto experts, professionals, investors, and enthusiasts are hopeful over the next few months. Stay in tune with CryptoNewsLine for updated information on the Solana-based DeFi platform Mango Markets as well as other breaking blockchain news.