Mirror Protocol Was in the Process of Being Drained with $2M Stolen
The crisis was averted after FatMan and fellow Terra Community members alerted the developer team at Mirror that the protocol was being actively drained with roughly $2 million already stolen.
According to FatMan, the attack was made possible through the utilization of a faulty price oracle that valued LUNC at around 5 UST when it was actually ‘under a micro cent.’ The discrepancy resulted in a scenario where for $1,000, the attacker could load up on $1.3 million in collateral and use it to borrow real assets that can be withdrawn.
FatMan went on to warn that the losses could be much higher once the stock markets opened earlier today. He explained:
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.
[Do Kwon and the Mirror Protocol] Please look into fixing the LUNC price oracle, because in a short while, all liquidity pools will be drained, Mirror will accrue irremediable bad debt, and the system will collapse in on itself. This is not the time to be negligent.
The Mirror Protocol Also Suffered a $90M Exploit that Went Unnoticed for Seven Months.
Source: Read Full Article