Estimated $8.7 Million Loss at Moonwell: Borrowing Restricted on Base

Moonwell has paused new borrowing following a suspected exploit in a lending market on the Base network, while CertiK and PeckShield estimated the potential loss at approximately $8.7 million.

Decentralized finance protocol Moonwell has launched an investigation into the MAMO Core Market on Base. Security firms stated that the attacker may have artificially altered the collateral price of the low-liquidity MAMO token to obtain a borrowing capacity higher than its normal value.

To prevent further risk, Moonwell reduced the new borrowing limits for all Core Markets on Base to 1 wei. This effectively prevents users from taking out new loans from these markets. The protocol also reduced supply limits for MAMO and WELL to the same level; no changes were made to other supply limits.

Allegation of borrowing cbBTC via MAMO price

PeckShield estimated that approximately $8.7 million worth of funds were withdrawn in the potential exploit, reporting that the funds were consolidated in DAI at a single address. According to the mechanism reported by CertiK, the attacker manipulated the price of MAMO used as collateral and then borrowed actual cbBTC from the mCBTC market. Blockaid also detected a similar attack method.

In an X post, Moonwell announced that it is investigating the development and will share more information as it becomes available. Moonwell’s WELL token has lost approximately 13% in the last 24 hours, while MAMO has dropped by approximately 9%.