Compound has suspended the supply of four popular collateral tokens to protect users from loss of funds due to a potential oracle manipulation attack.
Following the Mango Markets exploit that resulted in a loss of around $117 million, the DeFi Compound protocol announced that users can no longer use YFI, ZRX, BAT, and MKR tokens as collateral when obtaining loans. The suspension proposal was put to the vote of the Compound community and received 99% approval.
“For reasons of reasonable precaution, we propose to suspend the offer of the above assets. Thus, an oracle manipulation attack similar to the one that cost Mango Markets $117 million is less likely to occur on Compound,” the protocol team said.
Exploits based on the oracle manipulation strategy suggest that fraudsters are using seed funding to buy up a relatively illiquid spot token, causing the price of that asset to skyrocket in a very short period of time.
Then, as spot prices rise, traders use the artificially inflated value tokens as collateral to quickly borrow other tokens in hopes of getting all the funds out of the attacked protocol.
Earlier it was reported that attackers, using an exploit of the outdated Sovryn Borrow/Lend protocol, attacked Sovryn credit pools and withdrew 211,045 USDT and 44.93 RBTC.
Source: Bits
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