Mars Protocol 🔴

The galaxy's most powerful credit protocol.

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[Mars Protocol 🔴 @mars_protocol]

Martians, today we share our final update.

The wind-down of Mars Protocol, as approved in MRC-165, is now fully complete. All liquidation LTVs have been set to 0, remaining borrow positions have been liquidated, and every last bit of user funds, held in credit accounts or in Mars v1, has been safely returned directly to your wallets.

Funds held in Amber will follow in the coming days and will be communicated via @amberfi_io X channel.

This brings an orderly close to a journey that began five years ago with a bold vision: to build the most powerful, user-centric credit protocol in the Cosmos ecosystem. From the early days of pioneering leveraged strategies and credit accounts, through countless upgrades, community governance discussions, and moments of genuine innovation, Mars grew into something special, and that was entirely because of you. You lent, borrowed, ran high-leverage strategies, traded perps, debated proposals, shared feedback, and believed in what we were building together. We couldn't have asked for better Martians.

As we turn the page, the official Mars Discord and Telegram channels will be shut down in the coming days. There will be no further updates or support through those channels.

To every single one of you, users, investors, supporters, and contributors, who showed up, built with us, and made Mars what it was: thank you! From the bottom of our hearts. Your trust and energy made the ride truly unforgettable.

The Mars Protocol contributors wish you all the very best in whatever comes next. May your wallets grow, your strategies stay sharp, and your path in this space lead to brighter days ahead.

Mars Mission Control, signing off. 🔴

[Amber Finance @amberfi_io]

Dear Amber users,

All remaining user funds previously held in Amber have now been returned to user wallets.
This marks the final step in the wind-down. The process is now fully complete.

[Mars Protocol 🔴 @mars_protocol]

Martians, the proposal to wind down Mars Protocol has now moved to the on-chain governance stage.

Following the publication and forum discussion of [MRC-165] Proposal to Wind Down Mars Protocol, the formal proposal has been submitted to DAO DAO.

If approved, execution will begin on February 24, initiating the structured wind-down process:

• Gradual ~3% daily reduction of liquidation LTVs
• Progressive deleveraging across all assets
• Final LTV = 0 on March 21
• Full debt clearance and final migration
• Distribution of remaining funds to depositors

This represents the final governance step before execution.

We encourage all token holders to carefully review the proposal and participate in the decision-making process.

🗳️ Vote here:
https://t.co/KGs5Mz0sLP

Forum discussion remains available here:
https://t.co/mUQNJW31mZ

Thank you for your engagement, support and for being part of Mars. 🔴

[Amber Finance @amberfi_io]

Following Structured’s wind-down of maxBTC, Amber will begin coordinating an orderly unwind of its maxBTC strategy. No emergency action is required, but new Strategy deposits will no longer be accepted. The protocol will continue operating normally through March 23 while exposure is reduced.

In parallel, Neutron’s Bitcoin Summer campaign will continue to distribute rewards until the 16th of March, when Phase 3 will end. There will be no Phase 4.

To facilitate an orderly wind down of the protocol and protect user positions, we recommend the following courses of action:

For Strategy users (aka Leverage Loopers): To bring the protocol’s net exposure to zero and enable the final sunsetting of the protocol, liquidation thresholds for MaxBTC Strategies will be gradually reduced between March 16th and 23rd.

Neutron has waived the forfeiture condition for Strategy users. This means that leverage loopers can begin withdrawing positions at their convenience without losing accrued Phase 3 rewards.

To avoid liquidations, we recommend unwinding leveraged positions before the 16th of March. Please be aware of slippage and available liquidity to avoid any unnecessary losses. For larger positions, consider gradually reducing leverage over a few days to minimize slippage and give the pools time to rebalance if needed.

For lenders: Neutron will continue distributing rewards until the end of Phase 3. Withdrawing lent assets before the end of the phase would forfeit corresponding Bitcoin Summer rewards.

We recommend maintaining lending positions until the 16th of March to ensure a smooth experience and maximum rewards.

Our priority remains user protection and responsible risk management. We appreciate everyone who participated in the maxBTC strategy and will share further updates as the wind-down progresses. Our teams remain available via community channels to support users as they unwind positions.

Structured's announcement: https://t.co/ys6oIPAdZZ

[Mars Protocol 🔴 @mars_protocol]

Martians, today we published [MRC-165] Proposal to Wind Down Mars Protocol on the governance forum.

After evaluating the current state of the protocol, including long-term sustainability, operational overhead, governance complexity, and growth prospects, contributors believe continuing normal operations is no longer in the best interest of users. The focus now is a responsible and orderly exit.

The proposal outlines a structured wind-down from February 24 to March 21, 2026. Instead of an abrupt shutdown, liquidation LTVs across all assets would be reduced gradually (~3% per day), allowing borrowers to repay, add collateral, or close positions voluntarily. On March 21, all liquidation LTVs would be set to 0, any remaining borrow positions would be liquidated, and a final migration would be executed to fully clear debt from the system.

Once all debt is eliminated, remaining assets will be reconciled, depositors will receive their proportional remaining funds, contracts will be disabled or migrated to a final state, and Mars Protocol will cease operations.

For transparency: prior to putting forward this proposal, contributors explored whether a third party or new team would assume the Mars Protocol Foundation’s administrative responsibilities to maintain the protocol. No viable takeover materialized. Given that reality, a structured and predictable wind-down is considered the most responsible path forward.

The governance process includes a 5-day forum discussion followed by a 3-day on-chain vote. If approved, execution would begin on February 24.

We encourage all token holders and users to review the full proposal and provide feedback on the forum. We remain committed to handling this process transparently and responsibly.

Full proposal: https://t.co/nloTYVhJex

[Neutron @neutron_org]

The Mars remediation claim portal is now live

👇👇

https://t.co/2ahhdLaMGy

[Mars Protocol 🔴 @mars_protocol]

https://t.co/5DCgatj141

[Deploydon @Deploydon]

https://t.co/PY9OKAl8pE redemptions are live.

If you hold $JSD on @neutron_org you can redeem for the proportional amount in the @mars_protocol credit account.

All redemptions are logged in the contract..In the event of any future compensation, this will allow it to be properly distributed.

[Mars Protocol 🔴 @mars_protocol]

🛰️ USDC Migration Completed – Withdrawals & Borrowing Re-Enabled

The USDC market migration and haircut have now been successfully executed.

Following this, and as approved via governance, the Neutron outpost has been restored to its pre-incident configuration:

• USDC withdrawals are re-enabled
• USDC borrowing is re-enabled
• All other markets have deposit, withdraw, and borrow functionality set back to normal
• USDC LTV has been restored to its standard level (0.90)

Perpetual markets remain disabled until further notice.

The final haircut applied during execution was 29%.
This is slightly higher than the 27.5% previously communicated and reflects interest accrual and market state changes between the initial estimate and on-chain execution. The haircut percentage was finalized at execution time to resolve the remaining bad debt in the system.

Any bad debt resulting from the haircut will be fully covered by the Mars Protocol Foundation.

A follow-up migration will be executed to remove the remaining bad-debt accounts and fully clean up protocol state. Temporary mitigation measures introduced during the incident have now been rolled back.

We understand this has been a stressful period for many users, and we appreciate the patience shown while the migration and safety steps were completed.

Further updates will be shared as they become available.

[Mars Protocol 🔴 @mars_protocol]

🛰️ Heads-up on upcoming USDC market migration

Ahead of the upcoming USDC market migration and haircut execution, we want to clarify what this means for borrowers.

As part of the mitigation measures introduced earlier, the maximum borrow LTV was reduced (from 92% to 60%) to limit new borrowing ahead of the haircut. This was done to prevent accounts from increasing exposure beyond the forecasted haircut. The liquidation LTV was not adjusted at that time.

When the haircut is applied during the migration, accounts that are currently borrowed above the safe threshold may enter liquidation, as their collateral value will be reduced accordingly. This mainly affects positions that remained above the reduced borrow limits.

USDC deposited as collateral is not subject to the haircut, as it does not count as lent USDC. This is why USDC deposits remain open via Fund Credit Account.

Following the migration, we also expect significant USDC withdrawals, which may temporarily drive utilization higher and cause sharp increases in borrow interest rates until the market rebalances.

To give users time to adjust, we plan to provide a ~24 hour notice window before executing the migration, during which affected users can repay or rebalance their positions if needed.

[Mars Protocol 🔴 @mars_protocol]

🛰 [MRC-164] Update on Exploit Response and Action Plan - On-Chain Proposal

We’ve submitted an on-chain governance proposal outlining the final steps to resolve the USDC market shortfall following the recent exploit.

What this proposal does:

• Executes a DAO treasury transfer of USDC to the Mars Protocol Foundation to repay USDC bad debt
• Confirms a final USDC market adjustment of 27.5%, after applying Safety Fund, MPF, and CPV resources
• Signals community approval for using additional MPF/CPV funds to further reduce user impact
• Prepares a v2.3.3 Red Bank migration to reconcile USDC market accounting (executed separately after funding)

This proposal focuses on a clear, deterministic path to restore USDC market accounting while minimizing losses using available, community-approved resources.

Please review the proposal and cast your vote:
https://t.co/MPWvVlzjXp

[Mars Protocol 🔴 @mars_protocol]

🛰️ Mars Protocol Update

We’ve updated the forum proposal to reflect a clearer, more execution-focused plan for addressing the USDC market shortfall.

The update:
• Narrows the proposal to concrete, on-chain actions
• Clarifies how the USDC market accounting will be reconciled
• Details which remediation funds are planned to reduce the shortfall
• Removes non-binding language to avoid ambiguity

We encourage everyone to review the updated proposal and join the discussion on the forum before it goes on-chain.

[MRC-164] Update on Exploit Response and Action Plan: https://t.co/wISdPr4r4E

Transparency and clarity remain our priority as we move toward execution.

[Mars Protocol 🔴 @mars_protocol]

🛰️ Forum Update

We’ve updated the forum discussion post for the upcoming proposal to clarify scope, numbers, and what is (and isn’t) included in the vote.

If you’re following the situation, please read the updated post and join the discussion on the forum: https://t.co/vh5LNFtM9K

We’ll continue to share updates as this moves toward an on-chain proposal.

[Mars Protocol 🔴 @mars_protocol]

Update on Exploit Response and Action Plan

We’ve published a detailed forum post outlining our response to the recent exploit and the immediate action plan.

Key points:
• The ~$960k bad debt is isolated to the USDC lending market
• No other Red Bank markets or assets are affected
• The Safety Fund will be deployed to reduce protocol bad debt, lowering the estimated impact on affected USDC depositors
• Additional mitigation options are under evaluation
• A snapshot-based process will be used to ensure fair and accurate settlement

Please read the full forum post for details, and use the forum thread for discussions:

https://t.co/vh5LNFtM9K

We’ll continue to provide updates as governance actions and verification progress.

[Mars Protocol 🔴 @mars_protocol]

Update on Exploit Response and Action Plan

We’ve published a detailed forum post outlining our response to the recent exploit and the immediate action plan.

Key points:
• The ~$960k bad debt is isolated to the USDC lending market
• No other Red Bank markets or assets are affected
• The Safety Fund will be deployed to reduce protocol bad debt, lowering the estimated impact on affected USDC depositors
• Additional mitigation options are under evaluation
• A snapshot-based process will be used to ensure fair and accurate settlement

Please read the full forum post for details, and use the forum thread for discussions:

https://t.co/vh5LNFtM9K

We’ll continue to provide updates as governance actions and verification progress.

[Mars Protocol 🔴 @mars_protocol]

https://t.co/2lhAf4zFOW

[Mars Protocol 🔴 @mars_protocol]

🛰️ Market Update – Temporary Borrowing Restrictions

As part of our ongoing response to the recent incident, the Mars Protocol Risk Management DAO has executed an additional temporary risk-mitigation measure on the Mars Neutron outpost.

- Borrowing has been disabled for all assets except USDC
- USDC borrowing remains enabled to allow system operations and orderly position management
- Deposits and repayments remain enabled
- No changes were made to the Osmosis outpost or to Amber Finance.

During periods of elevated uncertainty and high utilization, unrestricted borrowing can drain available liquidity and increase the risk of additional bad debt. Temporarily limiting borrowing helps protect lenders, prevents further imbalance, and gives the system room to recover in an orderly way.

This measure is temporary and will be revisited as soon as conditions stabilize and the recovery plan is executed.

We’ll continue to provide transparent updates as the situation evolves.

A full post-mortem will be shared later today.

[Mars Protocol 🔴 @mars_protocol]

🚨 Mars Protocol Incident Notice

We are aware of a serious security incident involving the Mars Perps Market.

Our team initiated an immediate investigation and has already disabled all perps-related contracts and halted new activity, preventing any further impact.
Users can still reduce existing positions; some withdrawals may be temporarily unavailable due to market utilization.

This incident is isolated to Mars Perps. Amber Finance contracts and operations are not affected.

We are continuing to assess the situation alongside our engineering, risk, and security teams. A full post-mortem, including next steps and user guidance, will be shared as soon as our analysis is complete.

Protecting users is our top priority.
Thank you for your patience as we work through this.

[Mars Protocol 🔴 @mars_protocol]

🛰️ $USDC Market Update (Follow-Up)

As part of our ongoing response to the recent incident on Mars, we’ve implemented additional temporary adjustments to the $USDC market to prevent the system from becoming stuck and to allow an orderly resolution of the situation.

What changed:
- $USDC interest rate parameters were adjusted again, restoring the previous slope configuration at high utilization
- $USDC withdrawals from the Red Bank have been temporarily disabled
- Deposits, borrows, and repayments remain enabled

Due to extreme utilization, the availability of $USDC became constrained, which risked worsening market conditions and increasing bad debt. Temporarily disabling withdrawals also prevents unfair first-come-first-served access to any repaid debt while remediation is in progress.

These measures are temporary and focused on protecting users and ensuring a fair outcome for all participants.

$USDC withdrawals will be resumed once the outstanding bad debt has been addressed using the Safety Fund.

We’ll continue to communicate transparently as the situation evolves.

A full post-mortem and recovery plan will follow as soon as possible.

[Mars Protocol 🔴 @mars_protocol]

🛰️ $USDC Market Parameter Update

As part of our response to the recent incident involving the Mars Perps Market, we observed that the $USDC lending market was indirectly affected, causing borrow rates to spike sharply due to extreme utilization. This situation risked triggering unnecessary liquidations for healthy borrowers.

To protect users and stabilize the $USDC market during this period, the Risk DAO has executed an emergency parameter adjustment:

• $USDC borrow rate reduced from ~213% → ~15%
• Achieved by lowering the interest rate slopes to prevent cascading liquidations

This change ensures that borrowers are not penalized by abnormal interest rate behavior resulting from the incident and that positions remain safe while investigations continue.

All other protective measures remain in place, and we will continue to closely monitor market conditions.

As always, user safety is our top priority.
A full post-mortem and further updates will follow as the investigation progresses.

[Mars Protocol 🔴 @mars_protocol]

🛰️ Mars Protocol Update

As part of our ongoing response to the recent incident, we have identified and flagged the addresses involved and are actively tracking the related on-chain activity.

We are also attempting to establish contact with the party responsible to explore a potential resolution.

Our focus remains on protecting users and recovering funds where possible.

A full post-mortem and next steps will be shared as soon as possible.

[Mars Protocol 🔴 @mars_protocol]

🚨 Mars Protocol Incident Notice

We are aware of a serious security incident involving the Mars Perps Market.

Our team initiated an immediate investigation and has already disabled all perps-related contracts and halted new activity, preventing any further impact.
Users can still reduce existing positions; some withdrawals may be temporarily unavailable due to market utilization.

This incident is isolated to Mars Perps. Amber Finance contracts and operations are not affected.

We are continuing to assess the situation alongside our engineering, risk, and security teams. A full post-mortem, including next steps and user guidance, will be shared as soon as our analysis is complete.

Protecting users is our top priority.
Thank you for your patience as we work through this.

[Mars Protocol 🔴 @mars_protocol]

Following our earlier incident notice, we want to clarify that the issue is limited to the Mars Outpost on Neutron.

The Mars Outpost on Osmosis is unaffected, and all Osmosis markets continue to operate normally.

[Mars Protocol 🔴 @mars_protocol]

🚨 Mars Protocol Incident Notice

We are aware of a serious security incident involving the Mars Perps Market.

Our team initiated an immediate investigation and has already disabled all perps-related contracts and halted new activity, preventing any further impact.
Users can still reduce existing positions; some withdrawals may be temporarily unavailable due to market utilization.

This incident is isolated to Mars Perps. Amber Finance contracts and operations are not affected.

We are continuing to assess the situation alongside our engineering, risk, and security teams. A full post-mortem, including next steps and user guidance, will be shared as soon as our analysis is complete.

Protecting users is our top priority.
Thank you for your patience as we work through this.

[Mars Protocol 🔴 @mars_protocol]

🛰️ $USDC Market Parameter Update

As part of our response to the recent incident involving the Mars Perps Market, we observed that the $USDC lending market was indirectly affected, causing borrow rates to spike sharply due to extreme utilization. This situation risked triggering unnecessary liquidations for healthy borrowers.

To protect users and stabilize the $USDC market during this period, the Risk DAO has executed an emergency parameter adjustment:

• $USDC borrow rate reduced from ~213% → ~15%
• Achieved by lowering the interest rate slopes to prevent cascading liquidations

This change ensures that borrowers are not penalized by abnormal interest rate behavior resulting from the incident and that positions remain safe while investigations continue.

All other protective measures remain in place, and we will continue to closely monitor market conditions.

As always, user safety is our top priority.
A full post-mortem and further updates will follow as the investigation progresses.