The Moonwell lending protocol, built on the Base Ethereum L2, wound up with $3.7 million in bad debt after an attacker took advantage of an oracle malfunction that caused the price of wrsETH to be massively inflated. The Chainlink oracle used by the project erroneously reported that a single wrsETH token (Kelp DAO’s wrapped restaked ETH) was priced at around 1.65 million ETH ($5.8 billion). Within 30 seconds of the oracle reporting bad data, an attacker took advantage of the error to borrow huge amounts of tokens, which they then swapped to other tokens to cash out.Ultimately the attacker profited around 295 ETH ($1 million), but the protocol was saddled with significantly more bad debt that the team will now have to grapple with.

Total loss estimated at $3,680,000.