ParaSwap DAO allocates money to compensate victims of hacking
Decentralized finance (DeFi) aggregator ParaSwap has agreed to use funds from the treasury to compensate victims of hacking.
On April 4, Paraswap's Decentralized Autonomous Organization (DAO) proposed using treasury funds to refund victims of the AugustusV6 contract vulnerability.
After a three-day voting period, 96.81% of Paraswap voters agreed with the DAO's proposed user compensation scheme.
The ParaSwap AugustusV6 contract, which tentatively went live on March 18, aims to improve swap efficiency and reduce gas fees. However, the contract contains a critical vulnerability that could allow hackers to withdraw money from users if they allow the update.
While the quick recovery prevented $3.4 million in property loss, nearly $864,000 in property was lost in the process. ParaSwap has worked closely with blockchain analytics and security firms Chainalysis and TRM Labs to identify hacker addresses and monitor the movement of funds. The Foundation said:
“The (ParaSwap) Foundation will cover the remaining costs related to exposure, refunds, participation of security analysts, complete re-auditing of the contract, communication with authorities, and the preparation and execution of the refund process.”
On April 4, ParaSwap announced that it had recovered nearly $500,000 in assets. “Thanks to this rescue, the amount of unaccounted money – which consists of those depleted after users deposited into victim accounts – has been reduced by 63%,” he said.
According to Paraswap, providing full refunds to affected users is a measure of the project's long-term sustainability.
Related: Crypto Hacking Losses Decrease in Q1 2024 – Immunefi
According to data compiled by blockchain security firm PeckShield, nearly $100 million worth of digital assets were stolen in March.
Despite the losses running into millions, 52.8% of the stolen funds were recovered. Most of the funds raised came from a security risk involving Munchables, a blockchain-based non-vulnerable token (NFT) game.
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