Moonwell Halts Base Lending After Multimillion-Dollar MAMO Price Manipulation Exploit

Moonwell paused new borrowing on its Base Core Markets on August 27, 2026, after an attacker manipulated the collateral price of the illiquid MAMO token to borrow higher-value assets. Blockchain security firms CertiK and PeckShield estimated total losses at approximately $8.7 million, according to reports published on August 27, 2026. The exploit did not involve breaking smart contract code, according to BeInCrypto's report from August 27, 2026.

Security firms described the attack as a price manipulation scheme. The Defiant reported on August 27, 2026, that the attacker inflated the value of MAMO — a small-cap token with roughly $1 million in daily volume — and used the overvalued collateral to borrow real assets such as cbBTC. CertiK told The Defiant: "Attacker manipulated relatively illiquid MAMO's collateral price, then borrowed real cbBTC." Blockaid initially monitored and reported the drain of 50.6 cbBTC valued at over $4 million from Moonwell's mCBTC market, as detailed by Blockonomi on August 28, 2026. Blockaid flagged the exploit about an hour after it began, according to Protos. In addition to cbBTC, the attacker borrowed assets including USDC, WETH, and wstETH, Protos reported.

The stolen proceeds were swapped into the DAI stablecoin and consolidated at a single cryptocurrency address. On-chain data cited by The Defiant showed the address received 8,728,318 DAI. That address was funded on August 21 with about 0.1 ETH from Tornado Cash and approximately 99 ETH across bridges, according to The Defiant's August 27 report. Crypto.news, in an August 27, 2026 report, also said the extracted funds were converted to DAI and consolidated at one address.

Emergency 1 wei caps

Moonwell acknowledged the incident in a statement on August 27, 2026, saying it was aware of an issue affecting the MAMO Core Market on Base and was actively investigating. As a precaution, borrow caps for all Core Markets on Base were set to 1 wei, preventing new borrowing and limiting the potential for further impact. Supply caps for MAMO and WELL were also set to 1 wei, while all other supply caps remained unchanged. The Block reported the emergency action on August 27, 2026.

Market reaction

Following the incident, Moonwell's WELL token dropped by roughly 13% over a 24-hour period and MAMO declined by roughly 9%, according to reports from The Block (August 27, 2026), Blockonomi (August 28, 2026), and Crypto.news (August 27, 2026). One report from News.Bitcoin.com, published August 27, 2026, instead said both tokens fell by approximately 15%.

Previous pricing failures

This was not Moonwell's first pricing-related incident. In February 2026, cbETH was mispriced at approximately $1.12 instead of roughly $2,200, generating about $1.78 million in bad debt. In November 2025, an oracle issue with wrsETH created approximately $3.7 million in bad debt. BeInCrypto calculated on August 27, 2026, that Moonwell has suffered over $14 million in losses from pricing and oracle failures within a ten-month span. Protos, reporting August 27, 2026, described the latest event as Moonwell's fourth major pricing-related security incident in less than a year.

Partner responses and reported attacker economics

Mamo stated that its own smart contracts were not compromised and that funds deposited in Morpho remained unaffected, according to The Defiant's August 27 report. Asset management platform Zyfai disabled Moonwell-managed Morpho vaults and reported that its automated agents rebalanced capital out of affected vaults, as covered by News.Bitcoin.com on August 27, 2026.

Protos reported on August 27, 2026, that the attacker spent $7 million to pump MAMO's price and sold it after the attack for an estimated loss of $3.8 million. Other estimates of the total haul ranged from approximately $8.7 million, as estimated by CertiK and PeckShield, to nearly $9 million, as reported by Protos.