Case summary
What happened
On 2025-04-10, a Morpho App SDK configuration error sent exact-amount token approvals to the Bundler3 contract instead of its adapters. One bundled transaction was intercepted by a whitehat MEV bot, the funds were returned, and the frontend was rolled back within minutes; Morpho smart contracts were unaffected. On 2025-05-25, an oracle design flaw in a curator-created Base cUSDO/USDC LP lending market was manipulated, creating approximately 49.3k USDC of bad debt. The curator covered the shortfall within hours, leaving no external lender losses in that market. Morpho continued operating and releasing products in 2026.
Customer result
Customer outcome
Unknown
The April 2025 intercepted user funds were returned by the whitehat. The May 2025 market bad debt of approximately 49,303 USDC was fully covered by the curator within hours, leaving no external lender loss in that market. These event-specific resolutions are not converted into one universal platform-wide recovery percentage.
- Estimated recovery
- Unknown
- Repayment started
- —
- Repayment completed
- —
- Confidence
- High
Asset treatment
Terms risk
Customer-owned
Morpho is modeled as non-custodial smart-contract lending infrastructure. Permissionless market creation leaves oracle, collateral, curator, and market-configuration risk with each market context; the April 2025 App incident also shows application-layer transaction-construction risk. These risks do not imply centralized custody of supplied assets.
- Affected product
- —
- Confidence
- High
Known unknowns
Uncertainty
The April 2025 event was an application-layer configuration failure rather than a core-contract exploit. The May 2025 event was isolated to a curator-created market and oracle design; approximately 49.3k USDC market bad debt was fully covered by the curator and is not treated as protocol-wide customer loss.
Chronology
Historical record
Morpho App configuration error misroutes token approvals
A Morpho App update contained an SDK configuration error that sent exact-amount token approvals to Bundler3 instead of the intended adapters. One bundled transaction was intercepted by a whitehat MEV bot, which later returned the funds. Morpho rolled back the frontend update within minutes of being alerted, and the protocol's smart contracts were not affected.
Application-layer configuration incident. The intercepted funds were returned; no protocol-wide contract loss is inferred.
cUSDO/USDC LP oracle manipulation creates approximately 49.3k USDC bad debt
An attacker manipulated the oracle used by a Base Morpho lending market for Aerodrome cUSDO/USDC LP collateral. The attack created approximately 49.3k USDC of market bad debt. The market curator covered the shortfall internally within hours, after which no external lender loss remained and the affected market was moved to close-only allocation from the curator's vault.
The root cause was the market oracle design and curation, not a Morpho core-contract exploit. The bad debt was fully covered by the curator.
Source record
Evidence dossier
Filter by claim, reliability, source type, and whether evidence is linked to a specific event.
Event
2 sourcesMorpho App Incident: April 10, 2025
Morpho · 2025-04-17
Official incident report documenting the frontend SDK misconfiguration, whitehat interception and return of funds, rapid rollback, and unaffected Morpho smart contracts.
Post Mortem - Aerodrome cUSDO/USDC AMM LP Oracle Manipulation on Morpho Lending Market
Morpho Governance Forum / Clearstar Labs · 2025-05-26
Curator post-mortem documenting the Base oracle manipulation, approximately 49,303 USDC bad debt, internal coverage within hours, no remaining external lender loss, and close-only treatment.
status
2 sourcesRisk & Security Documentation
Morpho
Current Morpho documentation describing active protocol risk controls and explicit oracle-risk boundaries for permissionless markets.
Morpho Blog
Morpho
Current official product and protocol release stream confirming active Morpho development and deployments through August 2026.
No evidence records match the current filters.
Comparative records