Mango Markets announces shutdown after $117M hack, giving users until January to exit

Mango Markets, a decentralized finance (DeFi) platform built on the Solana blockchain, has officially announced its complete shutdown following a massive hack in 2022, which saw the platform lose $117 million.

The decision was made after the platform’s governance proposal received unanimous approval from the community, with over 23.3 million votes supporting the closure. In a final push toward winding down operations, Mango Markets has set January 13, 2025, at 8 PM UTC as the deadline for users to close their positions before the platform’s shutdown protocols go into effect.

As part of the process, Mango V4 will introduce significant changes to the lending parameters of the platform. These changes include a sharp reduction in the target lending ratio from 50% to just 0.1% of deposits, making it harder for users to borrow against their collateral. Additionally, interest rates on major cryptocurrencies such as SOL, USDC, USDT, ETH, and the platform’s native assets like mangoSOL and INF will see steep hikes, further discouraging new borrowing activity.

New positions will also face heightened restrictions, with collateral requirements increasing by a factor of ten, making it significantly more difficult for users to engage in new trades or borrow assets.

The shutdown is the culmination of events following the October 2022 exploit in which Avraham Eisenberg, a notorious figure in the DeFi community, carried out a price manipulation attack on Mango Markets. Eisenberg used just $5 million in USDC to artificially inflate the price of the MNGO token by approximately 1,000%, allowing him to borrow significant amounts against the inflated token prices. As a result, he drained $117 million from the protocol.

After the exploit, the Mango Markets team attempted to negotiate with Eisenberg, offering a bug bounty in exchange for the return of the stolen funds. However, Eisenberg’s actions led to legal consequences. Legal proceedings against Eisenberg commenced in October 2024, with charges of fraud and market manipulation. He faces up to 25 years in prison if convicted.

Interestingly, Eisenberg initially defended his actions as a legitimate trading strategy and even attempted to keep a portion of the stolen funds through a governance proposal. However, the community strongly rejected his proposal, with a unanimous vote to shut down the platform.

The closure of Mango Markets signals the end of an era for the project, as the platform’s community has seemingly accepted the inevitable outcome of the hack and the challenges in rebuilding trust.