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Curve Finance (CRV) to compensate users for security breach losses

TL;DR

  • Curve Finance plans to compensate users for a $70 million security breach.
  • With token holder approval, $49.2 million in crypto assets will be allocated to victims.
  • DeFi community shows solidarity, ensuring user trust after the security breach.

Decentralized Finance (DeFi) protocol Curve Finance (CRV) has announced plans to compensate users who suffered losses due to a major security breach earlier this year. The breach in late July resulted in significant losses for liquidity providers (LPs) on the platform.

Security breach shakes Curve Finance

In late July, Curve Finance experienced a major security breach that left many users reeling. The breach was linked to a vulnerability in the programming language Vyper 0.2.15, which allowed hackers to exploit several liquidity pools on the platform, resulting in losses totaling around $70 million. 

This incident sent shockwaves through the DeFi community and significantly impacted Curve Finance’s Total Value Locked (TVL), which plummeted from $3.25 billion to $1.67 billion at the time.

Recovery efforts and compensation proposal

In the aftermath of the security breach, the stolen funds from each affected liquidity pool were either fully or partially recovered. However, despite these recovery efforts, liquidity providers (LPs) were still shorted. In response to this situation, a proposal was submitted to address the impairment and compensate the victims.

Curve Finance’s team has worked diligently with the affected protocol teams for months to develop an equitable process for recompensating the victims. This process has culminated in a comprehensive compensation plan that the community believes is in the best interest of Curve DAO (Decentralized Autonomous Organization) and its users.

Curve Finance recently announced that it is taking decisive action to compensate those who suffered losses in the security breach. The platform has allocated approximately $49.2 million in crypto assets to the exploit victims. This allocation comes after token holders voted in favor of providing compensation to the affected users.

The compensation plan includes the following key elements:

$7.2 million worth of ETH that whitehat hackers recovered will be distributed to the DAO.

$42 million worth of CRV will be allocated to compensate for the unrecovered parts of the losses. These CRV tokens will be vested to ensure a fair and structured distribution.

Other funds recovered by whitehat hackers before the vote will also be distributed to the affected users.

A sign of community solidarity

This significant allocation of funds to compensate the victims of the security breach underscores the resilience and solidarity of the DeFi community. Curve Finance’s commitment to making affected LPs whole is seen as a positive step forward in maintaining trust within the DeFi space.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Ibrahim Abdulaziz

A fervent advocate, Ibrahim shares his wealth of knowledge on crypto and blockchain technology in an engaging and informative style. He frequents places where influencers gather for his next scoop. His vision is that the decentralized nature, security features, and potential for financial inclusion will drive widespread massive crypto adoption.

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