A Luna Classic pricing error led to an exploit on the Mirror Protocol, allowing the exploiter to drain four synthetic asset pools from the protocol so let’s read more today in our latest altcoin news.
The mismatch in the reported price of the underlying assets on the synthetic assets DEFI platform Mirror Protocol caused a huge exploit that has the potential to drain the funds entirely. The exploit was observed on Sunday by Mirroruser governance participants and at the time of writing, the Mirror BTC, Mirror Polkadot, Mirror Ether, and Mirror Galaxy pools on the protocol lost almost all assets that were valued at $2 million. Mirror allows trading of these synthetic assets like stocks or crypto on the Terra and Terra Classic Layer-1 blockchain, Ethereum, and BNB chain.
.@mirror_protocol has just been exploited again due to Terra Classic validators reporting the price of the new Terra 2.0 $LUNA coin (~$9.80) instead of the original Terra Classic $LUNC coin (~$0.0001)
— ChainLinkGod.eth (@ChainLinkGod) May 30, 2022
The pricing error of Luna Classic made the entire thing possible. The remaining validators on Terra Classic reported the price of LUNC reaching $0.000122 which was at the same level as the newly launched LUNA even though their real market prices differ. Chainlink community ambassador ChainlinkGod explained that the Terra Classic validators are running an outdated version of the Oracle software.
Blizz Finance and Venus Protocol suffered from a similar exploit in May when the price oracle Chainlink reproted that the LUNA price remained at $0.10 while the market price dropped below that. Blizz finance got drained entirely while Venus lost $11.2 million. The Terra community whistleblower FatMan, noted that the Mirror exploit will affect the other asset pools on Tuesday but the account also claimed that most of the pools can be saved if the developers intervened to fix the bug. It seemed however that the pricing error was fixed for LUNC as the price was verified by the oracle and returned to the real market value.
This is the second time that Mirror suffered from a major vulnerability and the previous bug that happened was exploited hundreds of times since 2021. The first exploit allowed the user to unlock other users’ collateral on the protocol and pull it out but the first exploiter got away with $30 million and was not noticed until 2022. the Terra ecosystem was relaunched when Terra 2.0 went online according to Do Kwon’s plans. Terra 2.0 is a fork of the now Terra Classic blockchain and the LUNA tokens are being airdropped to the investors that had the previous version of Luna and TerraUSD stablecoin after the collapse of the network earlier this month. Mirror Protocol tokens are down 2% in the past day and are trading at Mirror Protocol tokens are down 2% in the past day and are trading at $0..
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