Solana DeFi Projects Reopen Following $114M Mango Markets Hack

Two Solana-based DeFi protocols have reopened following the $114 million hack of lending protocol Mango Markets. 

Yield aggregator Tulip and stablecoin provider UXD have recovered tokens from Mango Markets, which was hit with a major exploit earlier earlier this month, and can now continue their services, they both said on Twitter. 

Mango Markets is a Solana-based platform for trading tokens and lending. Solana is the popular blockchain behind SOL, the ninth biggest cryptocurrency by market cap. Many DeFi projects—the sort that allow for peer-to-peer trading, borrowing, and lending—are now building on Solana. 

Both USDC and $RAY strategy vaults are now fully reenabled. Users can deposit or withdraw. The vaults will only deposit in Tulip lending pools for now as the team reevaluate risk across the ecosystem.

If you have any issues, please reach out on the Discord. https://t.co/cqaEsf2kCZ

— Tulip Protocol (@TulipProtocol) October 26, 2022

The hacker earlier this month was able to temporarily drive up the value of Mango Markets’ collateral due to a flaw in its system. The hacker then took out loans from Mango’s treasury and disappeared with the funds. 

Such a move is common in the world of DeFi hacks.

DeFi refers to apps and tools in the crypto world which allow users to quickly and easily do things that, in the world of traditional finance, would typically require checks and a middleman—like taking out a loan, for example. 

Such apps are experimental and new and therefore prone to exploits. Last year, lending protocol Cream Finance lost hundreds of millions in three separate hacks. 

When the industry really started gaining momentum in 2020, hacks like this happened frequently—mostly to apps built on Ethereum (which is where the world of DeFi started). Now that other blockchains like Solana have entered the space, bad actors are turning their attention to them.

Mango Markets offered to make a $47 million deal with the hacker to not press criminal charges—in return for $67 million of the stolen tokens. The person claiming responsibility for the hack later said they would return the tokens if the community agreed to pay off bad debt taken from a previous operation. 

UXD lost access to $19.9 million following the hack, while $2.5 million disappeared from Tulip’s protocol. Both protocols used Mango Markets to deposit funds.