More Markets Suffers $9.3M DeFi Exploit Via Ankr Staked FLOW and E-Mode
Vexoda Newsroom
Decentralized finance protocol More Markets experienced a significant drain of $9.3 million in WFLOW tokens, exploited through a combination of Ankr's liquid staking token and Aave V3's E-mode feature
A notable security incident has impacted the decentralized finance (DeFi) sector, with the lending reserve protocol More Markets reporting a substantial drain of approximately $9.3 million in digital assets. This event occurred on the Flow EVM, a blockchain network designed to support decentralized applications. The core of the exploit involved the illicit removal of Wrapped Flow (WFLOW) tokens from a specific lending reserve, highlighting ongoing vulnerabilities within DeFi infrastructure.
The attacker successfully siphoned off around 15.5 million Wrapped Flow (WFLOW) tokens, with a market valuation estimated at $9.3 million at the time of the incident. Data provided by the Web3 security firm Blockaid indicates that the exploit leveraged a sophisticated combination of financial instruments. Specifically, the perpetrator utilized Ankr Staked FLOW (ankrFLOW), a liquid staking derivative, in conjunction with 'E-mode' – a feature found on the Aave V3 lending protocol.
Understanding the mechanics of the exploit is crucial for comprehending its impact. Ankr Staked FLOW represents FLOW tokens that have been staked to secure the Flow network, providing liquidity for stakers. 'E-mode', or efficiency mode, is an advanced borrowing feature on Aave V3 that allows users to leverage significantly increased borrowing power. This mode is activated for assets whose price movements are expected to correlate closely, such as a liquid staking token and its underlying native asset, enabling more aggressive leveraged positions.
The aftermath of this exploit contributes to a challenging August for the cryptocurrency market in terms of security breaches. With $9.3 million stolen from More Markets, the total value lost to crypto hacks in August reached an estimated $139.7 million. While this figure places August as the third-worst month in 2026 for stolen funds, it represents a notable decrease from the staggering $254 million lost in July, according to data compiled by DefiLlama.
This incident underscores the persistent risks associated with DeFi protocols, particularly concerning the interplay between liquid staking derivatives and advanced borrowing functionalities. While More Markets had not officially confirmed the exploit or the extent of user losses at the time of reporting, the security firm Blockaid has provided key details. The exploit's reliance on E-mode suggests a potential misconfiguration or a novel attack vector targeting leverage amplification mechanisms within DeFi lending platforms.
Looking ahead, traders and analysts will be closely monitoring the response from More Markets and the broader Flow ecosystem. Key areas of focus will include any official statements regarding the incident, the recovery process, and potential enhancements to security protocols. Furthermore, the incident may prompt a re-evaluation of risk parameters for E-mode and the use of liquid staking tokens as collateral across various DeFi platforms to prevent similar future occurrences.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.