Mango Markets, a decentralized finance (DeFI) platform, is the latest victim of a hacking incident in the crypto industry. The platform, which is hosted on the Solana blockchain, is reported to have been exploited for over $100 million.
Mango Markets is a platform for trading digital assets on the Solana blockchain for spot margin and trading perpetual futures.
The Mango hack comes amid a series of exploits in the blockchain space, including the Solana wallet breach in August that drained users’ funds from hot wallets. The security breach led to multiple users losing funds to the tune of $5 million. Furthermore, another decentralized finance provider Binance Smart Chain (BNS), was hacked just a week ago, causing over $100 million in losses.
The hack was initially reported on Twitter by blockchain auditors OtterSec, and was subsequently confirmed by Mango blockchain in a tweet stating that it was “investigating an incident where a hacker was able to drain funds from Mango via an oracle price manipulation.”
In a series of tweets following the exploit, the DeFi protocol announced that deposits on the front end are disabled as a precaution. The team further urged users to not “deposit into Mango until the situation is more clear.”
The hack was reportedly carried out via an oracle price manipulation. Oracle manipulation is when an oracle smart contract is manipulated by hackers. It is the most common exploit in the DeFi space. Hackers of this kind of exploit cause DeFi protocol system failure, theft, and other damages.
Amid the news of the hack, Mango’s MNGO token nosedived by over 42% in the past 24 hours, according to CoinMarketCap.
On the hacker’s trail
Several theories are doing the rounds about how the hack happened. According to OtterSec founder Robert Chen, one of the first responders of the exploit, it is unclear how the attacker managed to inflate MNGO’s value. Joshua Lim, head of derivatives at Genesis Global Trading, suggests that the attacker might have manipulated their Mango collateral. Following this, they temporarily spiked up their collateral value and then took out massive loans from the Mango treasury.