The Moonwell protocol on the Base Layer 2 network has fallen victim to a significant cyber attack, resulting in the loss of assets worth around $8.7 million, according to CertiK researchers.
The attacker exploited a vulnerability involving the low-liquidity collateral of the MAMO token, which allowed them to borrow multiple assets, including cbBTC, USDC, wstETH, and ETH, leaving the platform with a substantial amount of unsecured debt.
Various analyses of the incident have produced differing estimates of the losses. Initial reports indicated about 50.6 cbBTC was lost, amounting to over $4 million, while analysts from ExVul assessed the damages at about 71.36 cbBTC, or roughly $5.7 million. CertiK confirmed the losses at $8.7 million, with other sources suggesting the total might approach $9 million.
In response to the breach, Moonwell confirmed the attack was linked to its main MAMO market and has implemented drastic measures, restricting lending to just 1 wei to prevent further debt accumulation. They also placed caps on the borrowing and supply of MAMO and WELL tokens.
Following the attack, MAMO saw an increase in trading activity, likely due to speculative trading, but the price later declined without a drastic crash. The WELL token also faced a 13% correction, dropping to a value of $0.0032.
This incident echoes a recent hack of the Maya Protocol, which lost around $1.7 million on August 19, highlighting ongoing vulnerabilities in the decentralized finance sector.
