The $90 million attack on the DeFi protocol Mirror Protocol on Terra was discovered seven months later.
The incident, noted by Terra community member and “FatMan”, shows that in October 2021, the DeFi application Mirror Protocol was hacked that resulted in a loss of $90 million. On the other hand, this attack went undetected for seven months. Security firm BlockSec also analyzed the transactions, confirming that the incident actually happened.
How Did It Happen?
When someone wants to trade a stock on Mirror, UST, LUNA Classic (LUNC) etc. must lock the collateral for at least 14 days. Once the transaction is complete, users can unlock the collateral to get the funds back, all with the help of smart contract generated ID numbers.
However, due to the error in question, Mirror’s lockdown convention allegedly failed to check if someone used the same ID more than once to shoot. In other words, the attacker realized that he could use a list of duplicate identities to repeatedly unlock hundreds of times more collateral than they had, meaning the attacker could withdraw money without any authorization. According to the transactions followed, the attacker spent a total of 90 million dollars in this way.
Market commentators describe the incident as one of the rare events where a major attack goes unexplained for a long time.
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