$8.7M Drained from Moonwell Protocol in MAMO Token Price Manipulation Attack

Key Points

• A malicious actor exploited Moonwell’s lending platform by artificially inflating MAMO token prices to extract genuine cbBTC
• Blockchain security analysts CertiK and PeckShield independently confirmed the damage at approximately $8.7 million
• The hacker converted all stolen assets to DAI and moved them to a single wallet
• The protocol immediately reduced borrow caps to 1 wei on all Base Core Markets to prevent additional losses
• WELL token value declined 13% while MAMO dropped 9% in the aftermath

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On August 27, the decentralized finance platform Moonwell fell victim to a sophisticated attack that resulted in approximately $8.7 million being extracted from its MAMO Core Market operating on the Base blockchain.

Multiple blockchain security organizations including CertiK, PeckShield, and Blockaid independently confirmed the attack methodology. The perpetrator artificially pumped the value of MAMO—a token with limited liquidity—to create overvalued collateral positions.

Using this artificially inflated collateral, the hacker withdrew legitimate cbBTC from Moonwell’s mCBTC lending pool. Blockaid’s preliminary analysis revealed 50.6 cbBTC had been extracted, valued at over $4 million, though PeckShield’s subsequent investigation placed the ultimate loss near $8.7 million.

All compromised assets were subsequently swapped for DAI stablecoin and transferred to a single cryptocurrency address.

Protocol’s Emergency Measures

The Moonwell team acted swiftly to contain the breach. They implemented emergency borrow caps of 1 wei across every Core Market on the Base network, essentially freezing all new loan origination.

Additionally, supply caps for MAMO and WELL tokens were decreased to 1 wei each. Other digital assets on the platform maintained their existing supply restrictions.

The protocol’s team indicated they would share additional details as their forensic analysis progresses. No comprehensive incident report has been issued yet, and fund recovery possibilities remain uncertain.

MAMO’s market valuation had demonstrated significant volatility even prior to this security incident. The token reached a peak of $0.227 before experiencing nearly 20% depreciation following its Coinbase listing in August 2025.

In the wake of the attack, Moonwell’s native WELL token experienced approximately 13% depreciation within a 24-hour window. MAMO similarly declined roughly 9% during the identical timeframe.

Recurring Security Vulnerabilities

This incident marks another chapter in Moonwell’s troubling 2026 security record. Earlier in February, a malfunctioning oracle incorrectly valued Coinbase Wrapped ETH at approximately $1.12 despite actual trading prices near $2,200, creating roughly $1.78 million in uncollateralized debt.

That problematic oracle allegedly contained programming developed using Anthropic’s Claude Opus 4.6 artificial intelligence model, with an erroneous scaling parameter triggering the valuation malfunction.

Subsequently in March, a bad actor invested approximately $1,800 in MFAM tokens to achieve voting quorum and advance a harmful governance motion on Moonwell’s Moonriver implementation. The motion threatened seven lending pools containing roughly $1.08 million before emergency multisignature controls prevented execution.

This latest August 27 breach occurs amid a sustained wave of DeFi security compromises. Through April 18 alone, cryptocurrency platforms experienced losses exceeding $606 million distributed across a minimum of 12 separate incidents.

The most substantial single attack was the $292 million Kelp DAO compromise, attributed to North Korea’s state-sponsored Lazarus Group. Analysis from Binance Research subsequently indicated April’s security breaches triggered approximately $13 billion in total value locked withdrawals from blockchain-based protocols.

Moonwell has confirmed its forensic examination of the MAMO Core Market breach continues.

The post $8.7M Drained from Moonwell Protocol in MAMO Token Price Manipulation Attack appeared first on Blockonomi.

Source: https://blockonomi.com/8-7m-drained-from-moonwell-protocol-in-mamo-token-price-manipulation-attack/