Moonwell hit by $8.7M exploit tied to MAMO collateral price manipulation

Moonwell suffered an estimated $8.7 million loss after an attacker allegedly manipulated the price of MAMO used as collateral, according to blockchain security firm PeckShield. PeckShield said the stolen funds—denominated in DAI—were traced to an Ethereum address beginning with 0xD71d. The incident occurred on Aug. 27 on Base, where Moonwell's lending markets operate. Moonwell moved quickly to curb further risk, cutting borrowing caps across its Base Core Markets to 1 wei—effectively halting new borrowing while the team investigates. Supply caps for MAMO and the WELL governance token were also reduced to 1 wei, while other supply caps were left unchanged. Moonwell said additional updates would follow. Blockaid's initial review flagged 50.6 cbBTC leaving the protocol, valued at more than $4 million, noting that the figure did not capture all affected lending markets. Researchers said the attacker inflated MAMO's quoted value in thin markets and then used the overvalued collateral to borrow assets including cbBTC, USDC, wstETH and ETH, later consolidating the proceeds on Ethereum. The episode appears to center on price manipulation rather than a direct compromise of Moonwell's core smart contracts. Investigators said Moonwell's oracle reflected the higher MAMO price, increasing borrowing capacity beyond what the token's real liquidity could support. The $8.7 million figure is a preliminary estimate and may change depending on recoveries and any remaining collateral value. The exploit follows earlier oracle-related issues at Moonwell. A wrsETH oracle malfunction in November 2025 reportedly led to about $3.7 million in bad debt, while a cbETH pricing misconfiguration added $1.78 million in February 2026. Separately, Term Finance vaults were estimated to have lost $8.5 million in a governance attack on Aug. 23. Term Labs subsequently closed Meta Vaults to new deposits and removed their DAO governance roles. Market reaction: MAMO was down 11.01% over the past 24 hours to $0.00929 at the time of reporting. Disclaimer: This content is for informational purposes only and does not constitute financial advice. Readers should do their own research before making financial decisions.