In a blog post on Saturday night, Warp Finance – the latest decentralized financing protocol (DeFi) to undergo a smart contract exploit – announced promising steps to compensate users after a nearly $ 8 million flash loan.
As Cointelegraph reported on Friday, the DeFi protocol, which offers stablecoin loans backed by liquidity pool token, lost $ 7.7 million in USDC and DAI when an attacker used multiple flash loans to create liquidity pool tokens, manipulate Warp’s price oracles, and empty Warp’s stablecoin treasury.
After the attack, a group of white hackers gathered to help the protocol assess the damage and create a solution to the exploit – and, in this case, recover some of the lost money.
In a post titled “Exploit Summary & Recovery of Funds,” the Warp team notes that they were unable to liquidate the attacker’s loan because of the manipulated oracle, but with the help of the whitehat team, they managed to get the collateral of the liquidity pool token.
“The collateral of the loan has since been secured by the Warp Finance team and allows us to repay approximately 75% of users’ deposited funds, thanks to the support of the Ethereum and white hat community,” it said. team.
The post said the team will pay out money to affected users on December 21, 2020, and has invited users to independently confirm that the snapshot they took of addresses is correct.
The team also doubled down on a complete compensation plan and pledged the distribution of IOU tokens that will be of some use in the future to cover the remaining 25% loss:
“While we are relieved that lost money has been partially recovered, we see this only as a first step towards healing Warp Finance users. For this reason, we will issue Portal IOU tokens to each affected user. The ultimate goal of the IOU token is to pay back users in full and potentially even give them a profit on what they initially deposited. “
The Warp team’s commitment to fully covering user losses is part of what one promising trend over exploited DeFi protocols.
In an earlier interview with Cointelegraph, the semi-anonymous core developer for Cover – a project that provides ‘coverage’ and an insurance-like product for DeFi users, that developers taking responsibility for losses will eventually push the space forward:
“I believe protocols (and their auditors) should take responsibility for the code they put out,” he said. “Whether it be by providing coverage themselves or paying back money, this type of behavior sets a strong precedent and allows users to have more confidence in the platforms they use, boosting TVL, so a win-win. “