Summary
Mars Perps was the perpetual futures product of Mars Protocol, deployed on the Neutron outpost of the Cosmos ecosystem. On December 14, 2025, the protocol suffered a mechanism design exploit that drained $973,079 USDC from lending depositors via skew-based same-block arbitrage. The exploit ultimately triggered a full protocol wind-down, which concluded in March 2026 with user funds returned and community channels closed.
Connected Entities
1 entities- + 1 more
Timeline(12 events)
2022-03-01
Mars Protocol launches on the Terra blockchain with a lending and borrowing product; TVL peaks near $350 million.
2022-05-01
Terra/LUNA ecosystem collapses. Mars Protocol loses the majority of its TVL. Combined $1.2 billion TVL decline across Mars and Astroport.
2022-12-01
Mars Protocol announces migration from Terra to the Cosmos ecosystem as a sovereign application chain.
2023-01-31
Mars Hub launches as an independent Cosmos application chain; MARS tokens distributed via airdrop to eligible Terra Classic holders.
2025-11-14
Attacker begins pre-staging operation via Tornado Cash, making seven ETH deposits approximately one month before the exploit.
2025-12-14
Mars Perps exploit executed on Neutron outpost. Attacker uses skew-based arbitrage to drain $973,079 USDC using $49,783 initial capital. Funds exit to Binance in five cross-chain hops. Mars Protocol disables all perps contracts.
2025-12-14
Mars Protocol publicly flags attacker addresses and announces investigation. Neutron outpost on Osmosis confirmed unaffected.
2026-01-28
Mars Protocol and Neutron Foundation launch remediation claim portal for affected USDC lending depositors. Claiming window open through February 27, 2026.
2026-02-21
Governance vote on MRC-165 (protocol wind-down) opens. Vote runs from February 21 to February 24, 2026.
2026-02-24
MRC-165 passes. Structured wind-down execution commences. Liquidation LTVs begin declining approximately 3% per day.
2026-03-21
All liquidation LTVs set to 0. Remaining borrow positions liquidated. Final debt clearance and fund distribution executed.
2026-03-23
Mars Protocol Foundation ceases operations. Discord and Telegram channels closed. Protocol wind-down confirmed complete; all user funds returned to wallets.
Decision Log
- hash: ArSJmL7MELzC11hho54yM9Nfun5LnNw4hVx5iiW8avfc
This investigation is cryptographically anchored to the Solana blockchain and source URLs are archived via the Internet Archive.
model: claude-sonnet-4-6
generated: 5/4/2026, 2:54:19 AM
last updated: 5/29/2026, 5:14:39 PM
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