Moonwell suspends new lending on Base after suspected MAMO price manipulation

Moonwell, a decentralized lending protocol, has temporarily halted new lending activity across its Core markets on the Base network following a suspected price manipulation incident involving the MAMO token. The move, announced on March 24, 2025, comes after an earlier attack that reportedly drained approximately $6 million from the protocol.

Emergency measures to contain the damage

In response to the incident, Moonwell reduced borrowing caps across all Core markets on Base to one wei—the smallest unit of a token—effectively preventing any new borrowing. The protocol also lowered supply caps for MAMO and its own governance token, WELL, to one wei, while leaving supply caps for other assets unchanged. These actions are designed to stabilize the protocol and prevent further exploitation while the team investigates the root cause.

The suspected manipulation targeted the MAMO Core market, where the price of MAMO was likely manipulated to enable the attacker to borrow against inflated collateral. This type of attack, often called a ‘price oracle manipulation,’ exploits vulnerabilities in how decentralized finance (DeFi) protocols determine asset values.

What this means for users and the broader DeFi ecosystem

For Moonwell users, the immediate impact is that new borrowing and supplying of MAMO and WELL are paused, but existing positions remain unaffected. The protocol’s team has stated that they are working on a detailed post-mortem and will update the community as more information becomes available. This incident underscores the persistent risks in DeFi, particularly around price oracles and market manipulation, and highlights the need for robust security measures.

Broader market context

The attack on Moonwell is not an isolated event. In recent months, several DeFi protocols have faced similar exploits, leading to increased scrutiny from regulators and calls for better security standards. For users, this serves as a reminder to stay informed about the platforms they use and to understand the potential risks involved in lending and borrowing digital assets.

Conclusion

Moonwell’s swift response to the suspected MAMO price manipulation reflects a commitment to protecting user funds, but the incident also highlights the ongoing challenges facing the DeFi sector. As the investigation continues, the community will be watching closely to see how Moonwell strengthens its defenses and whether this event triggers broader changes in how protocols handle price data.

FAQs

Q1: What exactly happened with Moonwell and MAMO?
Moonwell experienced a suspected price manipulation attack on its MAMO Core market on the Base network, leading to approximately $6 million in losses. The protocol responded by cutting borrowing caps and supply caps for MAMO and WELL to one wei to prevent further damage.

Q2: How does price manipulation work in DeFi?
Price manipulation in DeFi typically involves artificially inflating or deflating the price of an asset, often through large trades or exploiting low liquidity, to trick protocols that rely on price oracles. This can allow attackers to borrow more than they should or drain funds.

Q3: Are my funds safe on Moonwell?
Existing positions are currently unaffected, but new borrowing and supplying for MAMO and WELL are paused. Moonwell is investigating the incident and has stated that they will provide updates. It’s always recommended to monitor official channels for the latest information.