Mango Markets Declares Closure in January 2025 Following $117M Hack
Mango Markets, a decentralized finance platform based on Solana, has announced that it will completely shut down. This decision comes after the platform suffered a hack in October 2022, resulting in a loss of $117 million. The platform’s governance community has unanimously voted in favor of the shutdown, with a total of 23,347,212 votes supporting the proposal.
Users of the platform now face a crucial deadline of January 13, 2025, at 8 PM UTC to close their positions. This deadline coincides with the execution of the shutdown proposals, giving users a limited timeframe to manage their assets.
To prepare for the closure, Mango V4 is implementing significant changes to its lending parameters. The target lending ratio will be dramatically reduced from 50% to 0.1% of deposits, making it increasingly challenging for users to maintain positions on the platform.
Additionally, the protocol will introduce substantial interest rate increases across several major cryptocurrencies, including SOL, USDC, USDT, ETH, MSOL, mangoSOL, and INF. These changes will significantly raise the barriers to entry for users looking to open new positions, as collateral requirements will now be ten times higher than before.
The downfall of Mango Markets began in October 2022 when Avraham Eisenberg executed a sophisticated price manipulation scheme. With an initial capital of just $5 million in USDC, Eisenberg artificially inflated the MNGO token price by approximately 1,000%.
Through this manipulation, Eisenberg created an environment where he could borrow against inflated collateral values, ultimately draining $117 million from the protocol and leaving the platform in a precarious state.
Following the attack, the Mango Markets team attempted to negotiate with Eisenberg, offering a bug bounty in exchange for the return of the stolen funds. However, Eisenberg defended his actions and even proposed keeping a portion of the stolen funds through a governance proposal, demonstrating his audacious stance despite the impact on the platform’s users.
Legal proceedings against Eisenberg began in October 2024, charging him with fraud and market manipulation. If convicted, he could face up to 25 years in prison for his actions against the platform.
The unanimous governance vote that led to Mango Markets’ shutdown reflects the community’s acknowledgment of the platform’s inability to recover from the 2022 exploit.
For current users, the platform’s new parameters create a sense of urgency to exit their positions. The higher collateral requirements and increased interest rates serve as strong incentives for users to close their accounts before the January deadline.
The technical changes being implemented affect all supported cryptocurrencies, impacting both lending and borrowing capabilities. These modifications effectively make it impractical for users to maintain or open new positions on the platform.
The parameter changes in Mango V4 represent the final technical steps towards the complete shutdown. The reduction in lending ratios to near-zero levels effectively halts new lending activity on the platform.
The shutdown process includes strict timelines for user exits. After the January 13 deadline, the platform’s transaction processing capabilities will cease, making it impossible for users to access their positions through normal means.
Interest rates for all supported cryptocurrencies will see substantial increases, further pressuring users to close their accounts before the deadline.
The last day of active trading will mark the end of Mango Markets’ operations in the decentralized finance space. Users have until 8 PM UTC on January 13, 2025, to complete all transactions and close their positions.
