TLDR
- Solana DeFi protocol Mango Markets announces final shutdown following unanimous governance decision, impacted by 2022’s $117M exploit
- Platform sets strict January 13, 2025 (8 PM UTC) deadline for all users to exit positions
- Protocol implements drastic lending parameter changes, including 99.8% reduction in lending ratios
- Original attacker used $5M to manipulate token price and extract $117M from protocol
- Criminal charges against attacker Eisenberg could result in 25-year prison sentence
The decentralized finance world is witnessing the end of another protocol as Mango Markets prepares to permanently close its doors. The Solana-based platform has received unanimous approval from its governance community to shut down operations, following the aftermath of a massive exploit that drained $117 million from the protocol in 2022.
Time is now running short for platform users, who must close their positions by January 13, 2025, at 8 PM UTC. This deadline marks the moment when shutdown proposals become executable, effectively ending the platform’s operational life.
The protocol team has begun implementing drastic changes to facilitate an orderly closure. Among these modifications is a steep reduction in the target lending ratio, which will drop from 50% to a mere 0.1% of deposits, making it practically impossible to maintain leveraged positions.
Users hoping to open new positions on the platform will face substantial hurdles. The protocol has increased collateral requirements by a factor of ten, while simultaneously implementing sharp interest rate increases across all supported cryptocurrencies, including SOL, USDC, USDT, ETH, MSOL, mangoSOL, and INF.
The roots of this shutdown trace back to October 2022, when trader Avraham Eisenberg executed what would become one of DeFi’s most notorious exploits. Using just $5 million in USDC as starting capital, Eisenberg manipulated the MNGO token price, driving it up by roughly 1,000%.
The price manipulation scheme allowed Eisenberg to create artificially inflated collateral values, which he then used to borrow against and extract $117 million from the protocol. This move dealt a blow to the platform’s stability from which it never fully recovered.
In the immediate aftermath of the attack, Mango Markets’ team attempted to negotiate with Eisenberg. They proposed a bug bounty in exchange for returning the stolen funds, highlighting the team’s desperate attempts to salvage the situation.
Eisenberg’s response to the incident proved controversial. He initially claimed his actions represented a “highly profitable trading strategy” rather than an exploit. He even tried to legitimize keeping some of the stolen funds through a governance proposal, though this attempt ultimately failed.
The law caught up with Eisenberg in October 2024, when authorities began legal proceedings against him. He now faces charges of fraud and market manipulation, with potential prison time of up to 25 years if convicted.
The community’s reaction to the shutdown proposal reveals the extent of the platform’s decline. The vote received 23,347,212 votes in favor, with zero opposition, indicating widespread acceptance that the platform cannot continue operating.
For remaining users, the new protocol parameters create an urgent need to exit. The combination of increased collateral requirements and higher interest rates makes maintaining positions on the platform increasingly costly and impractical.
Technical changes affecting the shutdown span all supported cryptocurrencies on the platform. These adjustments impact both lending and borrowing capabilities, effectively pushing users toward closing their positions before the deadline.
The reduction of lending ratios to near-zero levels represents one of the final technical steps in the shutdown process. This change essentially halts new lending activity on the platform, preparing it for complete closure.
After the January 13 deadline passes, users will lose the ability to process transactions through normal platform functions. This hard cutoff makes the deadline particularly critical for any users still holding positions.
Interest rates across every supported cryptocurrency will see dramatic increases. This change affects both existing positions and any theoretical new ones, though the latter becomes largely irrelevant given the impending shutdown.
The final day of operations will conclude at precisely 8 PM UTC on January 13, 2025, marking the end of Mango Markets’ presence in the DeFi ecosystem.
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