Mirror Protocol, a DeFi application built on the Terra (CRYPTO: LUNA) blockchain, has seen $2 million in user funds drained over the weekend thanks to a pricing error.
What Happened: According to a May 29 alert from Mirroruser on the protocol’s community forum, the Mirror Protocol suffered an exploit on its mBTC, mDOT, mETH, and mGLXY synthetic asset pools.
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The Mirror Protocol enables users to trade synthetic versions of stocks like Tesla Inc (NASDAQ:TSLA) and Apple Inc (NASDAQ:AAPL) and cryptocurrencies on the Ethereum (CRYPTO: ETH), BNB Chain (CRYPTO: BNB) Terra Classic and Terra blockchains.
Mirror Protocol is being exploited again as we speak, and the devs are completely MIA. So far, the attacker has drained over $2m and counting - the attack will get worse when markets open tomorrow unless the dev team steps in and fixes the price oracle. @mirror_protocol (1/4)
— FatMan (@FatManTerra) May 30, 2022
“A bug in the pricing oracle is telling the system that LUNC is worth around 5 UST when it's actually under a microcent,” Terra researcher FatMan explained on Twitter.
“For $1k in LUNC, an attacker can now load up on $1.3m in collateral but can pull out real assets by borrowing.”
It seems the root cause was that Terra Classic validators were running an outdated version of the oracle software https://t.co/G25tUPcU0r
— ChainLinkGod.eth (@ChainLinkGod) May 30, 2022
On Sunday, The Block reported that a $90 million exploit from October 2021 was discovered on Mirror. The exploit went completely unnoticed for a period of seven months, despite an abundance of on-chain data confirming the event.
Price Action: According to data from Benzinga Pro, LUNA was trading at $9.04 at press time, up 40% over the last 24 hours.