MERLIN DEX Hack

TOTAL LOST $1.8M
Medium Drained Contracts / Access Control zksync era

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain zksync era Incident surface
Recovered - No recovery reported
All-Time Rank #669 By amount stolen
Auditors 1 Prior security audit

Incident Overview

Quick Summary

Merlin DEX on zkSync was exploited, with one exploiter stealing almost 850,000 USDC and transferring them to Ethereum. The amount drained from a liquidity pool on the DEX reached $1.82 million, and hackers transferred nearly 165,000 USDC to Binance and MEXC centralized exchanges. The Merlin team has released a post-mortem report stating that several members of the back-end team had drained all of their contracts, carried out on-chain transactions to drain all of Merlin's pools and manipulate front-end contracts.

Details of the Exploit

Merlin DEX on zkSync was recently exploited, with one exploiter stealing almost 850,000 USDC and transferring them to Ethereum. Further reports by PeckShield revealed that hackers transferred nearly 165,000 USDC to Binance and MEXC centralized exchanges. The Merlin team has released a post-mortem report stating that several members of the back-end team had drained all of their contracts, carried out on-chain transactions to drain all of Merlin's pools and manipulate front-end contracts.

According to the report, the back-end team implemented a function that allowed a call action to all Merlin pairs alongside hidden front-end contracts, draining all of Merlin's pools and the public sale. Merlin had submitted all intended contracts to be used on their platform to Certik for a full audit, but there was a clear oversight on the overarching power that the owner had of the pools. Furthermore, the back-end team, who also had access to Merlin's web-host, unknowingly manipulated the code to achieve their goal.

Merlin's priority is to return all funds to affected parties and participants on their platform at the earliest opportunity. They are working alongside on-chain analysts to monitor the movement of the stolen funds and have notified relevant authorities in Serbia (region of the back-end team).

Block Data Reference

Wallet addresses of the contract owner/deployer: https://explorer.zksync.io/address/0xc0D6987d…b28182, https://explorer.zksync.io/address/0xc7fD785f…95f5b0

This is classified as a Access Control Attacks . Compare similar hacks →

Incident Report

Protocol / Project MERLIN DEX
Date of Incident
Affected Chain(s) zksync era
Attack Technique Drained Contracts / Access Control
Classification Rugpull / Exchange (DEX)
Primary Source View Post-Mortem

Protocol Information

Protocol Type Dexs
Official Website mage.exchange/
Protocol Twitter/X @TheMerlinDEX
Team Anonymous
Source Code Unverified

What the Attacker Needed to Succeed

Understanding the prerequisites for this type of attack helps auditors identify protocols that are most at risk and helps developers build better defenses.

Technical Knowledge Operational-security tradecraft (phishing, malware, leaked seed phrases, or insider access) to obtain treasury signing authority
Capital Required Minimal capital - only enough to cover gas while draining the compromised accounts
On-Chain Access Valid signing authority over the compromised wallets / multisig signers, allowing direct transfer of funds or stake authorization
Target Reconnaissance Identification of MERLIN DEX's high-value treasury accounts and the authority / multisig structure controlling them
Execution Speed Speed to drain the compromised accounts before the team detects the breach and revokes signing authority or freezes the assets
Obfuscation Plan A strategy to launder and move stolen funds - typically through mixers, cross-chain bridges, or decentralized DEX swaps to resist tracing

What Auditors Should Check

Could this have been caught in audit? Likely — with a thorough Drained Contracts / Access Control audit checklist and test coverage
Audited by Certik — still lost $1.8M. Prior audits don't guarantee safety, especially after post-audit code changes.

If you're auditing a protocol with similar architecture to MERLIN DEX, these are the critical security checks that could have prevented this incident (April 2023).

  • Verify all logic paths related to Drained Contracts / Access Control are guarded by proper access controls and input validation - see the Access Control Attacks attack class for patterns
  • Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

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Security Audit History

Related Attack Classes

The technique used in this hack maps to these vulnerability classes in our security curriculum:

See all Access Control Attacks examples →

Access Control Attacks

Sources & References

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