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MNGO token falls 52% after $100m Mango Market exploit

By Raphael Sanis

09:35, 12 October 2022

Mango Markets
Mango Markets is a decentralised finance lending protocol on the Solana blockchain – Photo: Shutterstock

Mango Markets, a lending protocol on the Solana (SOL) blockchain, has been the victim of a $100m hack that has seen its MNGO token plummet.

Two accounts funded with USD Coin (USDC) took out an outsized position in the MNGO and PERP pairing. This manipulated the protocol’s oracles, allowing the attackers to max out their accounts and walk away with a net value of $100m.

The price of MNGO plunged by three quarters after the attack took place on 11 October.

MNGO’s downfall

The Solana-based decentralised finance (DeFi) platform reached a high of $0.08 on 11 October as the attacker manipulated the token’s price. It then closed the day at $0.019, a drop of more than 75%.

MNGO has since recovered slightly. As of 12 October, it was trading at $0.024, but it was still down 41% over the past week.

This exploit also damaged the total value locked (TVL) in the lending protocol. Mango Markets’ TVL plummeted from $104m on 11 October to just $209 the following day, according to DeFi Llama.

The hacker’s ultimatum

Recently, the attacker posted a proposal on Mango Markets’ governance platform. They said the funds would be returned if the protocol uses $70m to pay off bad debt.

XRP/USD

0.62 Price
+3.030% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

BTC/USD

65,626.85 Price
-0.260% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

SOL/USD

178.53 Price
+2.290% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

ETH/USD

3,344.71 Price
-4.060% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 6.00

This debt refers to a Solana investor who had to be bailed out after the whale had more than $200m in debt across multiple lending platforms. The bailout was made because of concerns that the investor could become liquidated, sending shockwaves across the market.

SOL to USD

The governance post said: “By voting for this proposal, mango token holders agree to pay this bounty and pay off the bad debt with the treasury, and waive any potential claims against accounts with bad debt, and will not pursue any criminal investigations or freezing of funds once the tokens are sent back as described above.”

At the time of writing, approximately 33 million MNGO votes are in favour of the proposal. A total of 66 million votes are needed to pass the proposal.

Mango Markets had previously tweeted its intention to communicate with the hackers and find an amicable solution.

However, the lending protocol has not yet responded publicly to the hacker’s proposal.

Markets in this article

PERP/USD
PERP/USD
0.6430 USD
-0.029 -4.410%
SOL/USD
Solana / USD
178.5345 USD
3.9812 +2.290%

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