DeFi Platforms Bleed $84 Million as Price-Manipulation Attacks Strike
DeFi lending platforms Tectonic and Moonwell have suffered significant losses due to price manipulation attacks. In total, the two incidents have resulted in over $84 million in losses.
Tectonic, a protocol running on the Cronos blockchain, was hit with an estimated loss of around $75 million. The attacker targeted the token TONIC, which is used as collateral within the protocol. By inflating the price of TONIC, the attacker unlocked more borrowing capacity than should have been available and pulled out liquid assets.
Moonwell's MAMO lending market on Base was exploited using $1.95 million in USDC to purchase over 94 million MAMO tokens. This inflated collateral values and enabled the withdrawal of about $11 million in assets, leaving the platform with a residual debt of $9.1 million.
The attacks are similar to a previous incident at Mango Markets, where Avraham Eisenberg manipulated MNGO token prices to pull out over $110 million in liquid assets. Regulators have been warning about such tactics since then, and this incident highlights the ongoing concerns raised by regulators regarding the risks associated with decentralized finance.