Mycelium DeFi Exploited Due to Price Feed Issues
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Mycelium, a multi-product Web3 ecosystem, unveiled that one of its liquidity pools suffered losses due to issues with the price feed. Also, the protocol's IP address was blocked by the Binance API module.
> π Mycelium ETH/USD pool exploited
As per a statement from the team of Mycelium, today, on Jan. 7, 2023, the platform suffered from an exploit by an arbitrage bot. The bot detected a discrepancy of the Ether (ETH) price on the platform (too high spread) and started abusing it with a large amount of liquidity.
The discrepancy should be attributed to the Bitfinex API, which started broadcasting highly volatile prices for the ETH/USDT pair at about 02:45 a.m. AEST. Meanwhile, the other price feed provider, Binance, was down as it blocked the U.S.-associated IP used by Mycelium.
As such, the system was unable to rebalance the price via an independent price feed. Mycelium only utilized data from Bitfinex and Coinbase as a result of the Binance outage that "was not widely communicated," the Mycelium team highlights.
Once the problem was detected, the team launched an internal investigation and stopped the trading. The pool was unavailable for 2.5 hours in total, the postmortem goes.
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