Mycelium Hack

TOTAL LOST $300K
Low Other

Summarize with AI

ChatGPT Perplexity Claude Grok
Affected Chain 2023 Incident surface
Recovered - No recovery reported
All-Time Rank #1143 By amount stolen
Auditors 1 Prior security audit

Incident Overview

Quick Summary

Mycelium ETH/USDT pool suffered a loss of ~300K due to an arbitrage bot attack.

Details of the Exploit

An attack by arbitrage bots caused a loss of around $300,000 to the Mycelium ETH/USDT pool. The bots identified a significant price difference in the ETH prices on the platform and took advantage of the liquidity. This price discrepancy was due to the highly volatile ETH/USDT trading pair price, which was broadcasted by the Bitfinex API at approximately 02:45 AM AEST time.

Meanwhile, Binance disrupted the system by blocking the US-related IP used by Mycelium, which prevented the system from rebalancing the price independently.

Incident Report

Protocol / Project Mycelium
Date of Incident
Attack Technique Other
Classification Exchange (DEX)
Primary Source View Post-Mortem #1 View Post-Mortem #2

Protocol Information

Protocol Type Exploit/Other
Affected Token MYC
Official Website mycelium.xyz/
Protocol Twitter/X @mycelium_xyz?
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 Deep understanding of other and Solidity and EVM internals
Capital Required Seed capital to cover gas and initial position setup
On-Chain Access Ability to interact with smart contracts and deploy a custom exploit contract
Protocol Analysis Identification of the exploitable vulnerability in Mycelium's contract logic - root cause: exchange (dex)
Execution Speed Precise transaction ordering and timing to exploit the vulnerability within a single atomic block
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 Other audit checklist and test coverage
Audited by Sigma Prime — still lost $300K. Prior audits don't guarantee safety, especially after post-audit code changes.

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

  • Verify all logic paths related to Other are guarded by proper access controls and input validation
  • Review privileged functions (owner, admin, governance) for potential abuse vectors - centralization risks should be documented and bounded with timelocks or multi-sigs

Master these auditing techniques with hands-on labs and real exploit scenarios in the Smart Contract Hacking course.

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Security Audit History

Sources & References

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