Mirror Protocol is currently suffering its second exploit, already lost as much as $2M
Mirror Protocol was the next victim of oracle issues after Terra released version 2.0. It is known that the prices of the assets on the platform are not accurate and this leads to a huge hole that threatens to drain liquidity…
Mirror Protocol is under serious liquidity threat
Mirror Protocol is a subproject of Terraform Labs, which was once eyed by the US SEC for providing US stock trading products to investors without registration. The two have been caught up in a legal battle ever since, as long as the SEC lawsuit against Ripple.
According to information from the Twitter account FatMan, the Mirror Protocol protocol is experiencing a vulnerability and may crash in the next few hours. Reportedly, the platform is experiencing an oracle bug that displays erroneous asset values, leading to massive damage to the protocol. Specifically, the price of the LUNC token (old LUNA) is $5, while the actual price is only $0.0001. Therefore, hackers can easily mortgage LUNC to withdraw the real assets in the project.
So far, the mBTC, mETH, mDOT and mGLXY pools have been drained. In around 12 hours, the market feed will kick in, and the attacker will be able to drain all of the mAsset pools (such as mSPY and mAAPL, mAMZN, etc.) – most of the pools can still be saved. (3/4)
— FatMan (@FatManTerra) May 30, 2022
This is not an empty warning because FatMan claims that the hackers quickly discovered the vulnerability and drained the liquidity of the mBTC, mETH, mDOT, mGLXY pools and the assets tokenized on the Mirror protocol. Once the US stock market resumes trading after the Memorial Day holiday around 20:30 on May 31, hackers can withdraw all the liquidity from the aforementioned pools, with estimated losses of around $2 million.
FatMan urges Terraform Labs CEO Do Kwon and the Mirror development team to quickly fix this oracle bug, before the rest of the mAsset pools, such as mAAPL and mAMZN, are also exhausted. The Mirror Protocol website is currently inaccessible. Meanwhile, DeFi site Llama reports the project’s total locked value (TVL) is now close to $19,000, down almost 100% from $704 million at the beginning of May.
Mirror core contracts have been deployed on Terra Classic, but its assets are available on Ethereum and Binance Smart Chain (BSC). The platform previously encountered a hack that cost up to $90 million.
MIR/USD 4-hour chart | Source: TradingView
However, the team silently patched the bug that has been backlog for 7 months without informing users. Mirror Protocol’s MIR token price did not have many negative fluctuations before the above information. However, the token dropped over 60% in May and is currently recording extremely low trading volumes.
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