Mirror Protocol suffers new exploit

Mirror Protocol, a DeFi application built on the Terra Blockchain has suffered another exploit, according to pseudonymous “Mirroruser” who posted on the Terra Research Forum May 28. The allegation was amplified by @FatManTerra via Twitter. 

So far, more than US$ 2 million has been drained in the latest exploit and if the bug in the LUNC pricing oracle isn’t fixed by 4:00 am ET tomorrow, all of its pools for tokenized assets will be at risk.

Mirror Protocol is a DeFi application that allows users to create synthetic assets called ‘mirrored assets’ or ‘mAssets’ that mirror the price of tech stocks traded on U.S. exchanges and use them to take long or short positions. The protocol’s oracle collects data from the price of stocks and some cryptocurrencies from the real world.

Mirror Protocol runs on the old Terra Blockchain, now called Terra Classic, which was supplanted by a new Blockchain after the depegging of its stablecoin TerraUSd (UST) and its token Luna, now called Luna Classic (LUNC).

Previously, back in October 8, 2021, Mirror Protocol was hacked and drained of US$ 89,706,164.03 million on Terra Classic, thanks to an exploit that enabled them to unlock collateral from the lock contract. The attacker was able to unlock UST funds several times from the protocol using the same transaction paying only US$ 17.54 in the process, according to Terra Classic on-chain data.  

The Mirror Protocol team has not made any public statements regarding the exploits which sparked criticism among the community. Despite this, FatManTerra thinks there is no ‘compelling evidence’ that points to an insider being responsible for the attack. This exploit went unnoticed for seven months. 

Photo: Mirror Protocol