Collateral Mispricing

Definition ∞ Collateral mispricing occurs when the value attributed to an asset used as security in a decentralized finance protocol does not accurately reflect its true market value. This discrepancy can result from oracle failures, market manipulation, or severe liquidity constraints. Such an event jeopardizes the stability of lending protocols by enabling borrowers to undercollateralize positions or lenders to liquidate at incorrect valuations. It directly compromises the integrity of collateralized debt positions within DeFi.
Context ∞ The problem of collateral mispricing stands as a critical concern for the operational robustness of decentralized lending platforms and stablecoin systems. Discussions frequently center on the reliability of oracle networks and the imperative for robust, decentralized data feeds to prevent price manipulation. Ongoing innovation focuses on implementing multiple oracle sources and time-weighted average prices to mitigate this significant systemic vulnerability.

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→Flash Loan Attack

→Governance Failure

→Collateral Mispricing

Lending Protocol Moonwell Exploited via External Oracle Price Manipulation

A critical oracle failure mispriced collateral, enabling the attacker to leverage a minimal deposit into a $1.1 million insolvency event.

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→Smart Contract Logic

→Base Network Exploit

→External Dependency

Moonwell Lending Protocol Drained Exploiting External Oracle Price Feed

A critical external oracle malfunction allowed collateral token mispricing, enabling immediate, high-speed, under-collateralized asset withdrawal.

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→Unaudited Code Risk

→Collateral Mispricing

→Third Party Notification

Bedrock Staking Drained Two Million via Unaudited Infinite-Mint Contract Flaw

A critical, unaudited smart contract logic flaw enabled token infinite-minting, compromising liquidity and resulting in a $2M asset drain.

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→Price Feed

→Decentralized Finance

→Price Distortion

Base Lending Protocol Drained via WETH Price Oracle Manipulation Flaw

An unverified lending contract's reliance on a non-robust WETH oracle allowed price manipulation, resulting in a $1.45 million asset drain.

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→Digital Asset Theft

→Oracle Manipulation

→Smart Contract Logic

Moonwell Lending Protocol Exploited via Oracle Price Manipulation

Critical oracle mispricing allowed a malicious actor to over-collateralize minimal assets, draining $1.1 million in a rapid attack.

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→Risk Mitigation Strategy

→Lending Protocol Risk

→Asset Valuation Error

Moonwell Lending Protocol Exploited via External Oracle Price Manipulation

A temporary oracle malfunction on the Base network mispriced a collateral token, enabling a $1 million uncollateralized asset drain via systemic lending protocol logic.

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→Code Audit Failure

→Smart Contract Exploit

→Financial Primitive

DeFi Automated Market Maker Drained via Protocol Precision Manipulation

A subtle, systemic flaw in complex pool mathematics allowed for precision rounding manipulation, enabling unauthorized asset draining and immediate liquidity shock across multiple chains.

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→Smart Contract Logic

→Oracle Manipulation

→Input Validation

Moonwell Lending Protocol Drained by Oracle Mispricing Vulnerability on Base Network

Oracle mispricing of wrstETH collateral enabled a flash loan attack, exposing lending pools to systemic liquidation risk.

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→Token Economics

→Blockchain Security

→Minting Exploit

Numa Protocol Drained $313k Exploiting Synthetic Asset Minting Logic

A critical flaw in the NumaVault's nuBTC minting function allowed an attacker to manipulate collateral and execute unauthorized liquidations, compromising protocol solvency.

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→Decentralized Finance Risk

→Risk Management Failure

→Asset Overvaluation

Lending Protocol Moonwell Drained via Oracle Mispricing Flaw on Base

External oracle volatility introduced a critical state-manipulation vector, allowing an attacker to leverage mispriced collateral for recursive asset drain.