Moonwell Lending Protocol Hit by $8.7 Million Exploit on Base Network

Decentralized lending platform Moonwell is investigating a security incident affecting its MAMO Core Market on the Base blockchain, after security firms flagged a multimillion-dollar exploit.

Blockchain security researchers CertiK and PeckShield both estimate the attacker made off with approximately $8.7 million, converting the stolen funds into DAI stablecoin and consolidating them into a single wallet address.

How the Attack Worked

According to security researchers, the attacker took advantage of the MAMO token’s relatively low liquidity to manipulate its price when used as loan collateral. Once the price was artificially inflated, the attacker borrowed real Bitcoin-backed assets from a related lending market, effectively draining funds from the protocol. A separate security firm identified the same attack pattern independently, adding further confirmation to the findings.

Moonwell Responds With Emergency Measures

As a precaution, Moonwell has restricted new borrowing across all its lending markets on Base by setting borrow caps to an effectively unusable minimum. Supply caps for the affected tokens were also locked down, though the platform said caps for its other markets remain unaffected. Following news of the exploit, Moonwell’s native token dropped roughly 13% over the past day, while the MAMO token fell about 9% over the same period.

Part of a Rough Stretch for DeFi Security

This incident adds to what has become one of the most difficult periods for decentralized finance security this year, with multiple protocols losing a combined total exceeding $600 million since April. Industry analysts have pointed to advances in artificial intelligence as a contributing factor behind the recent wave of increasingly sophisticated attacks. Moonwell said it plans to share further updates as its investigation continues.