MakerDAO (MKR) Suffers a Major Phishing Attack, Short-Term Problems Expected

MakerDAO [MKR] has been one of the most dominant protocols in the stablecoin and DeFi space. However, recent events could cause short-term problems for

Stablecoin and decentralized finance (DeFi) protocol MakerDAO (MKR) has been experiencing short-term difficulties following a recent phishing attack.

Onchain analytics account Lookonchain reported a major phishing attack just 5 hours ago, where a victim lost a total of $11.1 million to the exploit. The attacker managed to drain a large portion of the victim’s digital wallet.

Among the victim’s cryptocurrency holdings were 3,657 MKR tokens, valued at approximately $8.7 million, and 2.56 million PT Ethena tokens, valued at around $2.4 million.

In an attempt to quickly turn the stolen assets into usable currency, the attacker also dumped a large quantity of MKR tokens onto the market.

This sudden sell-off of 3,657 MKR tokens caused a significant price drop of 7% for the cryptocurrency. The attacker also swapped 2.56 million PT Ethena tokens for 689 ETH, which translates to roughly $2.41 million.

This price drop could have a significant negative impact on sentiment surrounding MKR. Investors may become wary of holding a token that is susceptible to such sudden and substantial losses.

News of the exploit can also spread fear and uncertainty, leading investors to sell their MKR holdings to avoid further losses.

The incident is also likely to contribute to a rise in overall short interest for MKR. With the price of MKR already declining, short sellers may see this as an opportune moment to enter the market, betting that the price will continue to fall.

Short positions against MKR have already grown to 50.83% at the time of writing.

However, despite all of these factors, on-chain data from Santiment showed some signs of hope for MKR.

Network Growth had grown materially in the last few days, implying that new users were showing interest in the MKR token. The Velocity also surged, indicating the heightened frequency of trading.

The rising interest from new addresses also suggests that many investors see the recent correction as an opportunity to buy more MKR at a discounted rate.

If this trend continues, MKR could recover and see green going forward. At press time, MKR was trading at $2,420.47.