Curve Finance Community Votes to Compensate Providers Affected by $61M Hack
Summary:
The Curve Finance decentralized finance protocol community has democratically voted to compensate liquidity providers affected by a $61 million hack in July. Over 94% of token holders sanctioned a $49.2 million token distribution to cover losses. The compensation includes $7.2 million worth of recovered Ether and $42 million of CRV for uncovered parts. The calculation is based on the quantity of Ether and CRV tokens in the pools before the hack, along with accumulated CRV emissions intended for liquidity providers since the incident. The surplus includes the tokens reclaimed after the event.
In a democratic move, the adherents of the Curve Finance decentralized finance (DeFi) protocol have opted to compensate the liquidity providers (LPs) who were affected by a hack in July that resulted in a loss of $61 million. The on-chain information substantiates that over 94% of the token bearers sanctioned the distribution of tokens amounting to more than $49.2 million on December 21. This is to cushion the damages befallen on Curve, JPEGd, Alchemix, and Metronome pools.
The impacted parties are now compensated through this decision. The recuperation comprises of a $7.2M worth of ETH tracked down by 'whitehat' hackers and transferred to the DAO for distribution. Further, unrecovered parts have been dealt with by issuing $42M worth of CRV. Prior to the vote, other recovered funds were conferred upon beneficiaries.
The loss calculation factors in the quantity of Ether (ETH) and CRV tokens in the pools prior to the hack, combined with the accumulated CRV emissions meant for LP distribution since the incident. The compensation will be sourced from the community fund in the form of Curve DAO (CRV) tokens, as per Curve's suggestion. Additionally, the final sum takes into account the tokens reclaimed post the event.
The unfortunate security breach occurred on July 30, posing a severe challenge to numerous DeFi protocols due to concerns over the ripple effects on the crypto sphere. As of July, the Curve's aggregated value lock (TVL) approximated $4 billion. The hack affected alETH/ETH, pETH/ETH, msETH/ETH, and CRV/ETH pools. Regardless of whether the stolen assets were fully or partially recovered, MEV bots rendered all compromised pools deficit, which spurred this proposal to fully reimburse the impacted LPs, according to Curve's proposal.
The malefactor exploited a loophole present in stable pools that operate using specific versions of the Vyper programming language. This programming script is a common preference for DeFi protocols due to its Ethereum Virtual Machine (EVM) oriented design. However, the glitch exposed versions 0.2.15, 0.2.16, and 0.3.0 of Vyper to reentrancy intrusions.
Published At
12/22/2023 9:15:47 PM
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