A DeFi protocol on Terra chain, Mirror Protocol suffered another exploit worth $2 million just after its 6 months old unnoticed exploit came out. The new exploit is so critical that if it isn’t corrected by tomorrow, the protocol’s future will be jeopardized.
Mirror Protocol enables users to hold short and long positions on tech stocks through synthetic assets. Mirror Protocol is running on the old Terra blockchain called Terra Classic chain.
Terra Community member and analyst FatMan, who highlighted the 6-month-old exploit, has revealed in his analysis that more than $2 million has already been drained away.
The remaining pools are linked to stocks and right now they are not available for trading. As pre-market trading opens at 4:00 AM ET. The community believes that the perpetrator could launch an attack tomorrow to steal the remaining pools.
To launch an attack, the perpetrator leveraged the protocol’s oracle. The issue occurred due to the large number of validators running nodes and using an outdated version of the price oracle.
Due to asynchronous nodes, these outdated nodes reflected LUNC to be worth 5 TerraUSD (UST) ($0.10) to Mirror Protocol, while its actual price is just a few cents.
“Please look into fixing the LUNC price oracle, because in a short while, all liquidity pools will be drained, Mirror will accrue irremediable bad debt, and the system will collapse in on itself. This is not the time to be negligent,” he said on Twitter, linking relevant Twitter accounts.
The attack has been already activated for the last few days, however, it couldn’t affect most of the tokenized stocks as the stock market was closed over the weekend and for Memorial Day in the US.