Moonwell slashes borrow caps to 1 wei after MAMO price manipulation exploit on Base

Moonwell, the decentralized lending protocol on Base, has reduced the borrow cap in its MAMO Core Market to 1 wei, the smallest possible unit of value on Ethereum-compatible chains. That’s roughly 0.000000000000000001 of a token. In practical terms, borrowing in this market is now frozen. The emergency measure came after a price manipulation attack on the MAMO token allowed an adversary to borrow an estimated $10 million in assets against artificially inflated collateral. Supply caps for both MAMO and WELL, Moonwell’s governance token, were also tightened to prevent the situation from getting worse. How the exploit worked MAMO, the utility and governance token for an AI-driven yield optimization tool integrated with Moonwell, fit the bill. With limited trading volume and shallow order books, the token’s price was vulnerable to manipulation. The attacker inflated MAMO’s market price, deposited the tokens as collateral into Moonwell’s lending market, and proceeded to borrow high-value assets against them. Among the assets drained: over $4 million worth of cbBTC, Coinbase’s wrapped Bitcoin product on Base. Before and after the emergency response Prior to the exploit, the MAMO market o...