Blockaid reported on Monday that the attacker exploited the lending reserve using an Ankr liquid staking token and efficiency mode (E-mode) to overborrow funds. The drained tokens, valued at roughly $9.3 million, were taken from the mFlowWFLOW reserve on the Flow EVM chain. The incident adds to a growing list of DeFi exploits targeting lending protocols, with attackers increasingly leveraging complex features such as E-mode and liquid staking derivatives to bypass collateral requirements.
More Markets Lending Reserve Drained of $9.3M in WFLOW Tokens
Blockaid flags exploit involving Ankr liquid staking token and E-mode on Flow EVM
Decentralized finance protocol More Markets has suffered a $9.3 million exploit, with an attacker draining approximately 15.5 million Wrapped Flow (WFLOW) tokens from its mFlowWFLOW lending reserve, according to Web3 security firm Blockaid.
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Analysis
Why This Matters
- Users of More Markets face potential loss of funds if the protocol cannot recover the drained assets.
- The exploit highlights ongoing risks in DeFi lending protocols, particularly those using advanced features like E-mode and liquid staking tokens.
- The incident may prompt tighter security audits and parameter adjustments across similar protocols on Flow EVM and other chains.
Background
More Markets is a decentralized finance vault infrastructure protocol operating on the Flow blockchain. Lending reserves allow users to deposit assets and borrow against them, with collateralization rules enforced by smart contracts. Efficiency mode (E-mode) is a feature that allows higher loan-to-value ratios for correlated assets, which can be exploited if the protocol fails to properly price risk. The Ankr liquid staking token used in this attack is a derivative that represents staked assets, often used to generate yield.
Key Perspectives
Blockaid (Security Firm): Identified the exploit and issued a public alert, warning that the attacker used an Ankr liquid staking token and E-mode to overborrow from the mFlowWFLOW reserve. More Markets (Protocol): The protocol’s team has not yet publicly commented on the incident. The exploit represents a direct loss of approximately $9.3 million in user funds. Critics/Skeptics: Some DeFi observers may argue that the use of E-mode with liquid staking tokens introduces systemic risk, and that protocols should implement more conservative risk parameters or additional safeguards.
What to Watch
- Whether More Markets pauses or adjusts its E-mode and liquid staking token parameters.
- Any follow-up reports from Blockaid or other security firms detailing the full attack vector.
- Potential recovery efforts or compensation plans for affected depositors.
Sources
- More Markets lending reserve drained for $9.3M: Blockaid · Cointelegraph