FatMan, an anonymous analyst and commentator familiar to the Terra community, has made a new set of allegations against the Mirror aggregated asset protocol. Specifically, an attack related to the key contract of this protocol.

Since the Terra incident in early May, FatMan has exposed the inner workings of the ecosystem. Accordingly, these revelations paint a picture of suspicious things going on. The latest allegations suggest that Terra users have been treated unfairly for far longer than previously assumed.

Details shared on social media on May 26 alleging that Mirror Protocol is perhaps not as decentralized as they claim.

He tweeted a detailed investigation into Mirror’s whale wallets, which he suspects are trying to conceal their influence by spreading MIR tokens on burner wallets.

“I have found evidence that this wallet and related wallets try very hard to make it look like MIR governance is not majority-controlled by a single entity – they do so by splitting up MIR between several fresh anonymous wallets.”

One of these wallets is tied to Terraform Labs CEO Do Kwon through a Decentralized Autonomous Organization (DAO) to which he serves as an advisor.

Tying all of this together, FatManTerra suggests that senior Terra individuals may be distorting governance and benefitting as a result. He also tweeted details of an intercepted Mirror Protocol attack about 18 days ago, coinciding with the time UST lost its peg.

The bug in question relates to the Mirror lock contract. Under normal circumstances, users lock their collateral, and after a 14-day holding period, they can use an unlock function to release the collateral.

Until the UST collapsed, there was no duplicate check in the code that managed the unlock function. That is, after the 14-day lock-in period, an attacker might repeatedly release funds. Furthermore, FatManTerra claimed that Mirror Protocol corrected the flaw without notifying the Mirror community of its existence.

Further investigations show attackers have exploited the bug hundreds of times since October 2021.

Suspicions were raised further when one of the wallets implicated timed a UST dump shortly before the Terra pegging mechanism was suspended.

According to PF92, a community investigator, at least 88 million UST was taken as a result of this vulnerability.

FatManTerra concluded the tweetstorm by saying he doesn’t know who is to blame but would continue to investigate.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

With a passion for untangling the complexities of the financial world, I've spent over four years in financial journalism, covering everything from traditional equities to the cutting edge of venture capital. "The financial markets are a fascinating puzzle," I often say, "and I love helping people make sense of them." That's what drives me to bring clear and insightful financial journalism to the readers of Coincu.

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News, Scam Alert

FatMan continues to “unmask” Mirror Protocol – the henchman of CEO Terra Do Kwon

FatMan, an anonymous analyst and commentator familiar to the Terra community, has made a new set of allegations against the Mirror aggregated asset protocol. Specifically, an attack related to the key contract of this protocol.

Since the Terra incident in early May, FatMan has exposed the inner workings of the ecosystem. Accordingly, these revelations paint a picture of suspicious things going on. The latest allegations suggest that Terra users have been treated unfairly for far longer than previously assumed.

Details shared on social media on May 26 alleging that Mirror Protocol is perhaps not as decentralized as they claim.

He tweeted a detailed investigation into Mirror’s whale wallets, which he suspects are trying to conceal their influence by spreading MIR tokens on burner wallets.

“I have found evidence that this wallet and related wallets try very hard to make it look like MIR governance is not majority-controlled by a single entity – they do so by splitting up MIR between several fresh anonymous wallets.”

One of these wallets is tied to Terraform Labs CEO Do Kwon through a Decentralized Autonomous Organization (DAO) to which he serves as an advisor.

Tying all of this together, FatManTerra suggests that senior Terra individuals may be distorting governance and benefitting as a result. He also tweeted details of an intercepted Mirror Protocol attack about 18 days ago, coinciding with the time UST lost its peg.

???????? What if I told you that Mirror Protocol, up until 18 days ago, was susceptible to the one of the most profitable exploits of all time, allowing an attacker to generate $4.3m from $10k in a single transaction? Here's how I discovered this – by pure serendipity. ????????

— FatMan (@FatManTerra) May 27, 2022

The bug in question relates to the Mirror lock contract. Under normal circumstances, users lock their collateral, and after a 14-day holding period, they can use an unlock function to release the collateral.

Until the UST collapsed, there was no duplicate check in the code that managed the unlock function. That is, after the 14-day lock-in period, an attacker might repeatedly release funds. Furthermore, FatManTerra claimed that Mirror Protocol corrected the flaw without notifying the Mirror community of its existence.

So – this bug exists and was quietly patched up – but we don't know if anyone ever noticed it or exploited it before. It would be hard to check since you would need to sift through months of chain data and millions of transactions – the Mirror forum didn't bother. (5/12)

— FatMan (@FatManTerra) May 27, 2022

Further investigations show attackers have exploited the bug hundreds of times since October 2021.

Two coffees later, as I was about to give up, I found this. Hold on… What's going on here? A single transaction from October 2021 unlocking one position over and over again – and it actually executed. Here's the transaction: https://t.co/2pbiwqKWNT (9/12) pic.twitter.com/lklZHIYQqV

— FatMan (@FatManTerra) May 27, 2022

Suspicions were raised further when one of the wallets implicated timed a UST dump shortly before the Terra pegging mechanism was suspended.

According to PF92, a community investigator, at least 88 million UST was taken as a result of this vulnerability.

FatManTerra concluded the tweetstorm by saying he doesn’t know who is to blame but would continue to investigate.

And that's how with a little bit of luck and a lot of research, I found out about one of the greatest yet most simple smart contract exploits in blockchain history that went under the radar for almost a year. Who did this? I have no idea, but I'll try to find out. (12/12)

— FatMan (@FatManTerra) May 27, 2022

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join CoinCu Telegram to keep track of news: https://t.me/coincunews

Follow CoinCu Youtube Channel | Follow CoinCu Facebook page

Harold

CoinCu News

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