Moonwell, a lending protocol on Base, said on August 27, 2026 that it was looking into a problem in its MAMO Core Market and had taken emergency steps to stop new loans.
In its official statement, the team said borrow caps for every Core Market on Base had been reduced to 1 wei, a limit so small that new borrowing is effectively frozen.
We are aware of an issue affecting the MAMO Core Market on Base and are actively investigating.
As a precaution, borrow caps for all Core Markets on Base have been set to 1 wei, preventing new borrowing and limiting the potential for further impact. The supply caps for MAMO and…
— Moonwell (@MoonwellDeFi) August 27, 2026
Supply caps for MAMO and the protocol token WELL were also set to 1 wei. Caps on other assets were left as they were.
The protocol said it would post again when it had more to share.
That official notice came after security firms reported that an attacker had inflated the price of MAMO, a thinly traded token used as collateral, and then borrowed more valuable assets against it.
CertiK, PeckShield, and Blockaid described the same outline: push MAMO’s market price higher, deposit the tokens, and draw real assets such as cbBTC from Moonwell’s mCBTC market, along with other liquid holdings.
PeckShield and CertiK both put the damage near $8.7 million.
PeckShield said the funds were later gathered into DAI at one address. Blockaid first flagged more than 50 cbBTC leaving the market, worth over $4 million at the time.This was not a typical contract exploit in which code is broken.
The loans themselves used normal protocol functions.
The weakness was the pricing of a low-liquidity collateral asset. Because MAMO does not trade in deep markets, its price can be moved with enough capital.
Reports of the day’s trading showed large swings on Base pools, giving the attacker far more borrowing power than the token’s usual value would support.
Moonwell’s 1-wei cap is a blunt circuit breaker. It blocks new risk without immediately forcing existing users to withdraw.
That is often the fastest option a lending market has when collateral prices look distorted.
WELL later fell about 13% over 24 hours and MAMO about 9%, according to market data cited after the announcement.
The episode again shows why listing small-cap tokens as collateral is risky.
Thin liquidity makes price feeds easier to game, and a successful pump can turn paper collateral into withdrawals of Bitcoin-linked and stable assets.
Moonwell has had earlier pricing trouble in 2026, so the latest freeze will raise questions about how MAMO was listed, what oracle or spot source was used, and whether similar assets should stay isolated or carry much lower collateral factors.
Until a full post-mortem is published, the protocol’s own words remain the official record: an issue in the MAMO Core Market on Base, an active investigation, and a network-wide pause on new Core Market borrowing.
