This year, the DeFi industry has been exploited for a total of $3 billion so far.
The recent Mango Market exploits highlighted the significance of a security update.
On December 26, the culprit behind the Mango Market exploit was arrested in Puerto Rico.
Is coming to an end. However, the arrest of the Mango Markets exploiter during the last few days of the year sparked a celebratory event in the crypto community.
In October, US authorities filed commodities fraud and manipulation charges against Avraham Eisenberg accused of attempting to steal around $110 million by manipulating the Mango Markets cryptocurrency exchange.
According to a recent court filing, Eisenberg was arrested for his criminal charges on Dec 26 in Puerto Rico(a Caribbean Island). In the Mango markets hack, Eisenberg manipulated the price of perpetual contracts for the platforms' native cryptocurrency token MNGO.
However, this hack is considered as one of the worst DeFi hacks of 2022.
On October 11, Mango Markets, a decentralized trading platform based on the Solana blockchain, announced in a tweet that the platform had suffered a massive hack, resulting in a loss of $110 million in funds.
Later, the platform discovered that it was not a hack, but rather market manipulation, which resulted in significant losses. The platform noted that the attacker manipulated the MNGO token's price oracle data in order to get substantial under-collateralized crypto loans from the Mango treasury.
The vulnerability was triggered by insufficient liquidity on the exchange market between MNGO and the USDC stablecoin, which was utilized as the price reference for an MNGO perpetual swap.
With only a few million USDC, the attacker was able to increase the price of MNGO by 2,394%. As a result, the attacker manipulated the price of MNGO from $0.038 to a high of $0.91, allowing him to borrow substantially against their MNGO token collateral.
Later, the hacker put forth its proposal of demanding $70 million in bounty. This scenario triggered a debate in the crypto community concerning the legitimacy of a DeFi platform and its smart contract.
If this kind of event occurs on a regular basis and the hacker requests a bug bounty, then who will refund the users' lost funds? Eisenberg initially described the event as a profitable trading strategy; does this imply that the DeFi industry is urgently needed a security update to prevent such circumstances?
The two most essential factors that lessen the likelihood of a DeFi platform hack are: The first is a DeFi security audit, which is the most effective way to address DeFi security vulnerabilities. Second is penetration testing, which is a low-cost solution for DeFi protocols. It is an authorized simulated attack on a DeFi platform to evaluate its security measures.
The aforementioned factors will undoubtedly assist a DeFi platform in strengthening its foothold in the industry and reducing the likelihood of engaging in any vulnerability.
Which, in your opinion, is the worst DeFi hack of 2023? Will the string of ongoing DeFi hacks last into 2023 as well? Please share your valuable thoughts in the comment section below.
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