How Low Liquidity Led Mango Markets to Lose Over $116 Million

An attacker took advantage of low liquidity to steal over $116 million from Mango Markets.

It appears that the hackers used an “oracle price manipulation” tactic in the exploit on the Solana-based DeFi network, as indicated by a tweet sent by the official account of the crypto exchange -Mango currency.

In mid-October, traders took advantage of a vulnerability in decentralized finance (DeFi) trading platform Mango Markets and stole over $110 million worth of cryptocurrency from the network.

We are currently investigating an incident in which a hacker was able to extract funds from Mango via oracle price manipulation.

We take steps to have third parties freeze outstanding funds. 1/

Another thread on Twitter provided a detailed breakdown of how the incident happened. The attacker began his mission by funding an account on the site with USD Coin (USDC) for $5 million, which was used to buy 483 units of perpetual contracts in Mango token (MNGO), the native cryptocurrency of the platform.

The attacker used this technique to boost the price of MNGOs from $0.03 to $0.91, increasing the value of their MNGO holdings to $423 million.

The funds were then used to acquire a $116 million loan using multiple tokens on the platform, such as Bitcoin (BTC), Solana (SOL), and Serum (SRM). Unfortunately, the loan wiped out all liquidity in Mango Markets, causing the price of MNGO to drop sharply to $0.02.

The Mango Markets development team later said they are looking into what happened and have launched an investigation into it. The protocol made the...