ParaSwap DAO allocates funds for hack victims’ compensation

Arijit Sarkar27 minutes agoParaSwap DAO allocates funds for hack victims’ compensationThe ParaSwap AugustusV6 contract, which momentarily went live on March 18, contained a critical vulnerability that allowed hackers to drain funds from users who approved the upgrade.110 Total viewsListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksThe community behind the decentralized finance (DeFi) aggregator ParaSwap has agreed to compensate hack victims using funds from the treasury. 

On April 4, the ParaSwap decentralized autonomous organization (DAO) pitched the idea of refunding the victims of the AugustusV6 contract vulnerability using its treasury funds.

After a three-day voting period, 96.81% of ParaSwap voters agreed with the DAO’s proposed method of compensating users.The Paraswap community voted to refund victims using DAO treasury funds. Source: vote.paraswap.network

The ParaSwap AugustusV6 contract, which momentarily went live on March 18, aimed to improve swapping efficiency and reduce gas fees. However, the contract contained a critical vulnerability, allowing hackers to drain funds from users who approved the upgrade.

While a swift rollback prevented a loss of $3.4 million in assets, roughly $864,000 of assets were lost in the process. ParaSwap collaborated closely with blockchain analytics and security firms Chainalysis and TRM Labs to identify the hacker addresses and trace the movement of the funds. The foundation said: “The (ParaSwap) Foundation will cover the remaining costs linked to the vulnerability, including the refunds, the engagement of security analysts, conducting thorough contract re-audits, communication with authorities, and the formulation and execution of the refund process.”

On April 4, ParaSwap announced the recovery of roughly $500,000 worth of assets. “Thanks to this rescue, the amount of funds still unaccounted for — which comprise users drained after depositing to a still compromised account — has been reduced by 63%,” it said.Source: ParaSwap

According to ParaSwap, providing full refunds to affected users is a step toward the project’s long-term sustainability.

Related:Crypto hacking losses decline in Q1 2024 — Immunefi

According to data compiled by blockchain security firm PeckShield, nearly $100 million in digital assets stolen in March hacks was recovered.Total hack losses in 2024 by month. Source: PeckShield

While the losses ran into the millions, 52.8% of the hacked funds were returned. Most recovered funds were from the security incident involving the nonfungible token (NFT) game based on the Blast network called Munchables.

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