ParaSwap to Use Treasury Funds to Reimburse $864K Hack Victims
Summary:
The decentralized finance (DeFi) platform ParaSwap's governing body has decided to reimburse victims of the Augustus V6 contract vulnerability using treasury funds. The proposal, which received broad support from ParaSwap voters, was a response to a hack that allowed cybercriminals to steal around $864,000 in assets from users. ParaSwap, in collaboration with blockchain analytics teams from Chainalysis and TRM Labs, has identified the hackers and managed to recover about $500,000 in lost funds. The DeFi aggregator sees the reimbursement as crucial to its long-term sustainability.
The collective governing body of the decentralized finance (DeFi) platform ParaSwap has decided to reimburse the victims of a cyber-attack using the organization's own financial reserves. This plan to employ treasury funds for reimbursing those affected by the Augustus V6 contract glitch was brought forward by the ParaSwap decentralized autonomous organization (DAO) on April 4. The proposal found favor with 96.81% of the voters within three days of balloting.
An earlier version of the ParaSwap Augustus v6 contract, launched on March 18 for the purpose of enhancing swapping efficiency and minimizing gas costs, harbored a severe loophole. This allowed cyber-criminals to siphon off assets of users who had approved the upgrade. Swift remedial actions helped avert a potential loss of $3.4 million worth of assets, but not before approximately $864,000 worth got pilfered.
In a bid to trace the perpetrators and their actions, ParaSwap joined forces with blockchain intelligence outfits Chainalysis and TRM Labs. The foundation stated that it would take on additional financial burden tied to addressing the glitch, such as the reimbursements, engaging security experts, re-evaluating contract audits, liaising with regulatory bodies and hammering out and implementing the repayment protocol.
On April 4, ParaSwap declared the retrieval of approximately $500,000 in assets. ParaSwap stated, "Due to this recovery, the outstanding deficit — coming from users who continued depositing into an already compromised account — has been cut down by 63%."
ParaSwap believes that the decision to fully recompense the aggrieved users bolsters the long-term viability of the project. As per data from blockchain security company PeckShield, almost $100 million worth of digital assets, stolen in cyber-attacks in March, have been reclaimed. This reflects that 52.8% of the assets lost in the attacks have been recovered, with most being from a security breach at the nonfungible token (NFT) game franchise called Munchables, which uses the Blast network as its base.
Published At
4/8/2024 11:33:45 AM
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