The lending protocol on Flow EVM More Markets appears to have encountered a security incident. A blockchain security company, Blockaid, stated that 15.5 million WFLOW from the protocol's lending reserves have been transferred out, which is estimated to be worth about 9.3 million US dollars at the current market price. More Markets has not yet confirmed the final loss, only indicating that the incident is still under investigation.
The attack targets LST and E-Mode.
According to Blockaid, attackers exploited a flaw in the protocol's mechanism for handling fluid collateral tokens (LST) and utilized E-Mode to amplify their lending capabilities. As a result, attackers were able to lend assets based on the manipulated collateral and repeatedly withdraw WFLOW from the mFlowWFLOW reserves.
Current public information indicates that the assets transferred mainly come from the WFLOW lending reserve of the protocol. More Markets has not disclosed more complete technical details, nor has the extent of losses claimed by Blockaid been confirmed.
Funds have been transferred to an external wallet.
On-chain records show that relevant assets began to flow to external addresses shortly after the incident, and some of the funds have been bridged out of the Flow EVM ecosystem. This means that the difficulty of subsequent tracking and recovery may increase.
As of now, the project team has not announced a clear recovery plan, nor have they indicated whether any funds have been frozen or if they have contacted relevant infrastructure providers for assistance in handling the situation.
WFLOW and FLOW both saw declines at one point.
Security incidents quickly spread to the secondary market. WFLOW fell by about 9% within an hour, and FLOW also fell by about 8.7%, reaching a low of $0.0262.
From the disclosed information, this round of decline was mainly triggered by protocol security incidents, rather than a simultaneous downturn in the broader crypto market. For the Flow ecosystem, the subsequent focus will be on loss confirmation, capital flow, and whether the protocol will introduce remedial measures.
