News

Following the exploit, the Warp Finance compensation plan is making promising progress

In a blog post on Saturday night, Warp Finance – the latest DeFi (decentralized finance) protocol reportedly to suffer a smart contract exploit – announced promising steps to compensate users after a nearly $ 8 million flash loan attack.

As Cointelegraph reported on Friday, the DeFi protocol, which offers stablecoin loans for liquidity pool token collateral, lost USDC and DAI of $ 7.7 million when an attacker used multiple flash loans to obtain liquidity pool tokens to create, manipulate Warp's price oracle and empty Warp's stablecoin coffers.

After the attack, a group of Whitehack hackers came together to help the log evaluate the damage and create a fix for the exploit – and in this case, reclaim some of the money lost.

In a post titled "Exploit Summary & Recovery of Funds," the Warp team found that the attacker's loan could not be liquidated due to the rigged oracle, but the Whitehat team managed to secure the collateral for the liquidity pool Recover Token Credit.

"The loan collateral has now been secured by the Warp Finance team, and thanks to the support of the Ethereum and white hat community, we can return about 75% of the users' deposited funds," the team said.

The post stated that the team will be cashing out funds to affected users on December 21, 2020 and asked users to independently confirm that the snapshot of addresses they took is correct.

The team also doubled a full compensation plan and promised the distribution of IOU tokens that will be useful in the future to cover the remaining 25% loss:

“While we are relieved that some lost funds have been recovered, we see this only as a first step towards fully making Warp Finance users. For this reason, we issue portal IOU tokens to every affected user. The ultimate goal of the IOU token is to fully refund users and possibly even make them a profit on what they originally deposited. "

The Warp team's dedication to fully recovering from user losses is part of what may be a promising trend in exploited DeFi protocols.

In a previous interview with Cointelegraph, the semi-anonymous core developer for Cover – a project that offers DeFi users coverage and insurance-like products – said developers who take responsibility for losses will ultimately move the space forward:

"I believe protocols (and their reviewers) need to start taking responsibility for the code they put out," he said. "Whether they provide coverage or reimburse funds themselves, this type of behavior sets strong precedent and allows users to feel more secure in the platforms they use, which helps increase TVL and is therefore a win- Represents win situation. "

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close