Once taken advantage of, the Warp Finance compensation scheme is taking promising steps

In a blog post Saturday night, Warp Finance – the latest decentralized finance protocol (DeFi) to fall victim to smart contract exploitation – announced promising steps toward compensating consumers following a nearly $ 8 million flash loan attack.

As Cointelegraph reported Friday, DeFi’s protocol, which offers fixedcoin loans on liquidity pool token collateral, lost $ 7.7 million in USDC and DAI when an attacker used multiple flash loans to create liquidity pool tokens, manipulate Warp price oracles, and drain coffers fixed Warp Warp. .

Following the attack, a group of whitewash hackers convened to assist the protocol to assess the damage and create a solution for the exploitation – and, in this case, recover a portion of the lost money.

In a post titled, “Exploit Summary & Recovery of Funds,” Warp’s team states that they could not cancel the attacker’s loan because of the manipulated oracle, but with the help of the whitehat team managed to recover the liquidity fund’s loan loan collateral.

“Since then, the loan collateral has been secured by the warp finance team and will allow us to return around 75% of consumer deposit funds, thanks to support from the Ethereum community and a white hat,” said the team.

The post stated that the team will pay money to affected consumers on December 21st, 2020, and invite consumers to independently confirm that the snapshot they took of addresses was correct.

The team also doubled down on a complete compensation plan, promising to distribute IOU tokens that will have some utility in the future to cover the remaining 25% loss:

“While we are relieved that lost money has been partially restored, we see this as just the first step in making Warp Finance consumers whole. For this reason, we will issue IOU Gateway tickets to all affected users. The ultimate goal of the IOU token is to refund consumers in full, and possibly even give them a profit on what they initially deposited. “

The Warp team’s dedication to fully covering consumer losses is part of what could be a promising trend across exploited DeFi protocols.

In a previous interview with Cointelegraph, Alan, a semi-anonymous core developer for Cover – a project that offers ‘insurance,’ and insurance-like products to DeFi consumers – said developers who take responsibility for losses will push the where to go eventually:

“I think protocols (and their auditors) need to start taking responsibility for the code they push out,” he said. “Whether by themselves providing coverage, or repaying money, this kind of behavior sets a strong precedent and allows consumers to feel more confident in the platforms they use, that helps boost TVL, so win it all. ”