DeFi Platform Warp Finance Recovers 75 % Of $5.85M Stolen Funds

By José Oramas December 21, 2020 In DeFi, Hackers

Warp Finance announced the recovery of $5.85M, 75% of funds stolen on December 17 — when an attacker withdrew a $7.76m through a flash loan exploit.

The DeFi platform said the distribution and compensation of the stolen funds for the affected users will begin on December 21. The compensation is proportional to the number of W-DAI (DAI stablecoin) and W-USD (U.S. Dollar) held at the moment of the snapshot.

While the hacker got away with nearly $8M, the DeFi firm managed to retrieve the loan collateral. White Hat hackers, which is slang for ethical hackers — helped to locate and secure the funds. Approximately 75% of users will get a reimbursement.

The attacker managed to hack Warp Finance by using several flash attacks, like multiple flash loans through dYdX protocols, flash swaps via Uniswap, and flash liquidity.

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IOU Tokens For Compensation

Warp Finance plans to compensate for the remaining 25% loss with IOU tokens. According to the firm, the Portal IOU tokens will refund users in a near future, and even giving them a profit on their initial deposits.

While we are relieved that lost funds have been partially recovered, we see this only as a first step to making Warp Finance users whole. For this reason, we will issue Portal IOU tokens to every affected user. The end goal of the IOU token is to fully refund users and potentially even giving them a profit on what they initially deposited. 

Stated the firm .

Cyber-crimes have seen a surge in 2020, with more than $100M stolen including recently 8M stolen from DeFi insurer CEO Ciphertrace,  a cryptocurrency forensics and blockchain threat intelligence firm, reported on November 11 that 45% of all thefts in the first six months of 2020 were Defi hacks, equating to about $51.5M — 40% of volume for that period.

José Oramas
Author

José Oramas

José is a journalist and translator with a keen interest in blockchain and cryptocurrencies.

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