Morpho's PT-reUSD loops hit with $36.39M in liquidations after yield-spike trade
Security & Exploits ·
A wallet briefly pushed the implied yield on YT reUSD to 20 percent, marking down PT reUSD collateral and force-liquidating leveraged Morpho positions built on it.
The liquidations, totaling approximately $36.39 million, were traced to wallet 0x854e...690d, which market-bought YT reUSD to drive the implied yield up before quickly dumping the position, according to a post on x.com. Because YT and PT tokens are inverse instruments, spiking the implied yield on YT instantly marks down the price of PT — and Morpho's PT reUSD loop positions used that PT as collateral, meaning the yield print alone was enough to breach the loans' LLTV threshold and trigger forced liquidations.
The mechanism required no sustained capital commitment. The report describes the move as needing only a five-minute price mark to trip the liquidation threshold across affected loop positions, rather than a real, held position in the underlying asset.
A separate account of the episode attributes the liquidations to an oracle misconfiguration on Morpho's PT-reUSD market, putting the total near $37 million and estimating the attacker's profit at approximately $3 million, per leviathan.news. The two figures — $36.39 million and roughly $37 million — are close enough to describe the same liquidation event, though the corroborating account frames the root cause differently, as an oracle flaw rather than a yield-spike trading maneuver.
It remains unresolved whether the episode stemmed from a design flaw in how Morpho's PT loop markets price collateral against implied yield, from an oracle misconfiguration specific to the PT-reUSD market, or some combination of both. Also unconfirmed is the attacker's exact profit from the trade, since the original report does not state a take while the corroborating source puts it at approximately $3 million. Whether Morpho or the reUSD market operators intend to adjust the LLTV mechanism or oracle setup for PT-based loop positions has not been addressed in the available material.