Ethereum-Based Moonwell Protocol Exploited: DeFi Oracle Risks Exposed

The Moonwell lending protocol, built on Ethereum's multi-chain ecosystem, faced a $1 million exploit due to oracle pricing vulnerabilities. This incident follows closely after the Balancer breach, underscoring ongoing security challenges in decentralized finance. Blockchain security firm BlockSec Phantom identified abnormal outflows from Moonwell's Base and Optimism deployments, where attackers capitalized on pricing discrepancies between wrapped ETH derivatives. The November 2025 exploit highlights the critical need for robust price feed mechanisms in Ethereum's DeFi landscape as the ecosystem continues to scale.

Moonwell Lending Protocol Exploited for $1M Due to Oracle Pricing Flaw

Moonwell, a multi-chain decentralized lending protocol, suffered a $1 million exploit linked to faulty oracle data. The attack occurred just one day after the larger Balancer breach, highlighting persistent vulnerabilities in DeFi price feeds.

BlockSec Phantom detected suspicious outflows from Moonwell's Base and Optimism deployments. The exploit Leveraged a pricing discrepancy between wrapped ETH derivatives, allowing the attacker to borrow 20 WSTETH against just 0.00002 wrstETH. Chainlink's oracle reportedly returned an erroneous price of $5.8 million per wrstETH, enabling the arbitrage.

The hacker executed the entire operation within a single block, repaying the loan immediately after generating profits. Security analysts suggest a MEV bot may have facilitated the attack, which netted 295 ETH before being halted.

DeFi Protocols Lose $129M in 48 Hours Amid Oracle Failures

Decentralized finance suffered a brutal start to the month as two major protocols—Balancer and Moonwell—endured exploits totaling $129 million. The incidents highlight systemic vulnerabilities in oracle infrastructure and access controls that continue to plague multi-chain ecosystems.

Balancer absorbed a $128 million breach on November 3, followed by Moonwell's $1 million loss the next day. The latter resulted from a chainlink oracle malfunction that catastrophically mispriced wrapped staked Ether (wrstETH), allowing an attacker to siphon funds through manipulated collateral valuations.

Blockchain sleuths at CertiK traced the exploit to rapid-fire transactions executed within single blocks—a tactic designed to evade liquidation triggers. The fallout was immediate: Moonwell's Total Value Locked plunged $55 million, while its WELL token cratered 12%.

Seven Ethereum Protocols Form Alliance to Advance On-chain Transparency

Seven major Ethereum protocols have united to establish the Ethereum Protocol Advocacy Alliance (EPAA), a coalition aimed at promoting self-custody and intermediary-free transactions. The alliance includes Aave Labs, Aragon, Curve, Lido Labs Foundation, The Graph Foundation, Spark Foundation, and Uniswap Foundation. Together, they seek to safeguard core infrastructure securing over $100 billion in on-chain assets.

"Decentralization is the foundation of Ethereum’s credibility and resilience," said Sam Kim, Chief Legal Officer of Lido Labs Foundation. The EPAA will focus on shaping public policy to protect Ethereum’s decentralized ecosystem amid growing regulatory scrutiny.

The move comes as digital asset adoption surges, with retail portfolios allocating 5% to 20% to crypto, according to PwC’s crypto Survey 2025. The alliance aims to ensure regulations reflect the practical workings of on-chain protocols, often misunderstood in policy debates.

Extreme Leverage Wipes Out $455M for Seven Crypto Traders Amid Market Volatility

High-leverage trading has proven catastrophic for seven prominent traders, with collective losses reaching $455 million over eight months. The derivatives platform Hyperliquid became a battleground where even seasoned players like Machi Big Brother faced brutal liquidations. Taiwanese-American entrepreneur Jeffrey Huang, known as Machi Big Brother, saw his position reduced to less than $90,000 after injecting $1.73 million to maintain leveraged ETH longs.

Liquidations exceeding $300 million in 24 hours underscore the perils of excessive leverage. "Stay away from high-leverage trading," warns analytics firm Lookonchain, noting how fleeting gains inevitably give way to total wipeouts. The October 11 market crash triggered a domino effect, with ETH's drop to $3,668.39 liquidation thresholds erasing months of accumulated profits.