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CRITICALWeb3

WEB3-MANGO-MARKETS-2022

Web3 · Solana · Mango Markets

Summary

Beginning October 11, 2022, Avraham 'Avi' Eisenberg manipulated the price of Mango Markets' native MNGO governance token, using roughly $5M to inflate MNGO by about 1,000% across two accounts. He first deposited USDC into two accounts and opened large offsetting MNGO perpetual positions against himself, so one account held a massive long. He then bought MNGO spot on the thin external venues feeding Mango's price oracle (including FTX, AscendEX and Serum), spiking the oracle-reported price and the notional value of the long. The protocol valued the unrealized perpetual gains as collateral, so against this artificially inflated collateral he borrowed and withdrew approximately $110-117M in crypto assets, leaving the protocol with unrecoverable bad debt. The exploit was an economic/oracle-manipulation attack, not a code bug, enabled by low MNGO liquidity. Eisenberg was charged by the SEC and CFTC and convicted by a Manhattan jury in April 2024, though those criminal convictions were later vacated in 2025.

How to avoid it in your code

  • Use manipulation-resistant oracles (TWAP, multi-source medians) with deep-liquidity venues, not thin spot markets.
  • Cap how much unrealized perpetual PnL can count as borrowable collateral.
  • Apply per-asset borrow caps and position limits scaled to real market liquidity.
  • Add circuit breakers that halt borrowing on abnormal short-window price moves.
  • Stress-test collateral valuation against single-actor oracle-spike scenarios.

References

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