Pricing mismatch may lead to collapse in Terra’s Mirror Protocol: Anonymous users

Pricing mismatch may lead to collapse in Terra’s Mirror Protocol: Anonymous users

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Mirror Protocol, the decentralized finance (DeFi) application built on Terra Classic, is suffering from an ongoing exploit of more than US$2 million due to a pricing error on LUNC, a pseudonymous Mirror forum user known as “Mirroruser” alleged.

See related article: Winning back the trust of the Terra community a tall order for Do Kwon: Experts

Fast facts

  • The Mirror Protocol DeFi platform allows users to create and trade assets that mirror the price of stocks or major cryptocurrencies.
  • Twitter user @ChainLinkGod pointed out that Terra Classic validators are reporting the price of the new Terra 2.0 token worth US$9.80, instead of Terra Classic (LUNC) token that is priced near zero.
  • A majority of the Terra Classic and LUNC validators are running an outdated version of the pricing mechanism, Todd Garrison, founder of blockchain developer Block Pane, wrote on Twitter
  • The exploit can be spotted in Bitcoin, Ethereum, Polkadot and Galaxy Digital stock liquidity pools within Mirror Protocol, Twitter user @FatManTerra said. 
  • The remaining pools mirroring tokenized assets (mAssets) may be at risk of total drainage if the bug isn’t fixed by 4 a.m. Eastern time (ET) May 31, when the stock pre-market trading opens, another forum user “MirrorRescue” claimed.
  • Twitter user @FatManTerra first discovered the previous drainage in Mirror Protocol worth US$90 million that took place last year. 
  • Terra launched its new blockchain over the weekend, taking over the name Terra (LUNA), while renaming the old chain and token Terra Classic and LUNA Classic (LUNC).

See related article: Terra 2.0 new LUNA is down 70% since restart

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