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Terra: Mirror Protocol could collapse due to a new exploit

 


Terra 's Mirror Protocol was the victim of an attack in which the perpetrators stole $2 million. The exploit remains unpatched and could get even worse in the coming hours.


Terra 's Mirror Protocol was the target of another cyber attack yesterday. Users report that the attackers have already looted more than $2 million worth of various assets. Affected assets include mBTC, mETH, mDOT, and mGLXY. MirrorUser was the first to notice the attack.


FatMan is part of the Terra Research Forum, which has been posting analysis and updates on the Terra collapse over the past few weeks. FatMan assumes that there is an error in the pricing oracle. This tells the system that the asset is "worth around $5, even though the actual price is less than a microcent." Accordingly, “for $1,000 worth of LUNC, an attacker can now load $1.3 million in collateral and then pull out real-world assets of that value.”


FatMan also provided an example of the transaction on the Terra Finder website . He expects the situation to get even worse once the market opens. The attackers could then pull all assets from the pools, including those tied to stocks like mAAPL and mAMZN.


The Mirror Protocol team has not yet commented on the issue. FatMan is concerned that this behavior will only make the situation worse as time is running out to fix the vulnerability. He asked both the development team and Do Kwon to fix the issue:


“Mirror will accumulate bad debts and the system will collapse. Now is not the time to be careless."


User Todd G explained how the problem can be fixed: by updating the pricing oracle. Terra needs to resolve the situation quickly before things get any worse.

Terra is up to its neck in water

It seems FatMan has already given up hope: "It looks like nothing is going to happen and so the project will surely collapse tomorrow." FatMan also said there are other vectors and urged users to withdraw their money from the project.


After a dramatic crash , the exploit is now the final nail in Terra 's coffin . The last thing the project needed was an attack. This could end the last hopes left with the release of Terra 2.0 .


It is not yet clear how high the loss from this attack will be. However, it is already clear that the image damage is enormous. Investigations are already underway against the Terra staff and Do Kwon and this incident will not make the situation any easier.


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