After Mango Market exploit, Compound pauses four tokens to protect against price manipulation
Decentralized lending protocol Compound has paused the supply of four tokens as lending collateral on its platform, aiming to protect users against potential attacks involving price manipulation, similar to the recent $117 million exploit from Mango Market's, according to a proposal on Compound's governance forum.
With the pause, users will not be able to deposit yearn finance (YFI), 0x (ZRX), basic attention token (BAT) and maker (MKR) tokens as collateral to take loans.
The proposal passed on Oct. 25 with 99% of all voters in favor. It stated:
In a security review of Compound v2 performed in September, the Volt Protocol team identified potential market manipulation risks related to low-liquidity tokens. The report explained:
On Twitter, Robert Leshner, founder of Compound, explained that the conservative approach won't impact existing users.
Following the @mangomarkets exploit, @gauntletnetwork has proposed disabling new supply for the most thinly traded collateral.This conservative approach won't impact existing users, and encourages the migration of usage to Compound III (which is resistant to the attack vector). https://t.co/yMQDgRXru7
On Oct. 11, Avraham Eisenberg, the hacker behind the Mango's Market exploit, manipulated the value of a posted collateral — the platforms’ native token, MNGO — to higher prices, then took out significant loans against the inflated collateral, which drained Mango’s treasury.
The exploiter, self-described as a digital art dealer on Twitter, claimed that he and a team of hackers undertook a “highly profitable trading strategy” and that it was “legal open market actions, using the protocol as designed.”
After voting a proposal in the Mango's governance forum, Eisenberg was allowed to keep $47
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