Radiant Capital begins paying off debt after $4.5M flash loan exploit
Cross-chain Lending Block Radiant Capital has begun paying off debt after its Flash Loan exploit protocol drained $4.5 million earlier this month.
According to a January 23 announcement, Radiant has made a successful initial payment of 1,190 Ether ($2.6 million) with approximately 720 Ether ($1.6 million) of bad debt remaining.
“Remaining bad debt will be repaid over the next ~90 days using OpEX funds under RFP-27, which provides the ability to use DAO reserve funds if liquidity is found sooner,” Radiant staff wrote.
The payment was made based on the RFP-27 proposal issued on January 8. Nearly three-quarters (73%) of users voted to use the Radiant DAO Treasury and operating expenses to pay off the bad debt. At the time of passing, the Radiant DAO treasury had a balance of $5.2 million, with a protocol revenue of about $500,000 per month.
“To ensure the security of the protocol and to guarantee unlimited access to all users, it is necessary to recapitalize the protocol and fully repay the damaged debt,” commented the developers.
On January 2, the Radiant Dollar Coin (USDC) lending pool on the Arbitrum network was exploited for $4.5 million after an attacker discovered a rounding flaw in the Radiant codebase, leading to an aggregate validity error. The error allowed the Radiant attacker to profit from repeated deposits and withdrawals.
“The root cause is not new: it basically takes advantage of time when a new market is activated in the credit market (from the famous Compound/Aave fork),” blockchain analytics firm Beosin said. At the time of the crash, the exploit locked up Radiant at 1.3% of its total value.
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