According to “Mirroruser,” a pseudonym who wrote on the Terra Research Forum on May 28, 2022, the DeFi application Mirror Protocol, which is designed on Terra, is supposedly vulnerable to yet another attack. This afternoon, “@FatManTerra” escalated it on Twitter.
According to FatMan, who has been writing on the Terra research forum in recent weeks, the current exploit has reportedly drained over $2 million from the LUNC pricing oracle, with the possibility for more.
What is Mirror Protocol?
Mirror Protocol is a decentralized application (DApp) that allows users to create digital synthetics that reflect the price of real-world assets like stocks. The primary contracts of Mirror were built on Terra Classic; however, its assets are accessible on Ethereum and Binance Smart Chain (BSC). It had previously been the victim of a $90 million breach uncovered seven months later.
The initial exploit lets the user gain access to other users’ protocol collateral and extract it for themselves. He stated that the first exploiter made off with “far over $30 million” and was not discovered until May 2022.
Furthermore, governance contributor Mirroruser on the protocol’s forum discovered the second attack on Sunday. On the protocol, the synthetic asset pools Mirror BTC (mBTC), Mirror Polkadot (mDOT), Mirror Ether (mETH), and Mirror Galaxy (mGLXY) have lost virtually all of their assets worth over $2 million.
On the Terra and Terra Classic layer-1 blockchains and BNB Chain and Ethereum, trading of synthetic assets such as stocks and cryptocurrency is possible.
The exploit was made possible via a price issue in Luna Classic (LUNC). Even if their real market values varied dramatically according to CoinGecko, the remaining validators on Terra Classic indicated that the price of LUNC at $0.000122 was the same as the freshly minted Terra (LUNA) ($9.32).
