The decentralized finance (DeFi) aggregator ParaSwap has made the decision to compensate victims of a recent hack using funds from its treasury. On April 4, the ParaSwap decentralized autonomous organization (DAO) suggested the idea of refunding victims who had fallen prey to the AugustusV6 contract vulnerability. Following a three-day voting period, the majority of ParaSwap voters (96.81%) agreed with the DAO’s proposed compensation method.
The AugustusV6 contract, which briefly went live on March 18, aimed to enhance swapping efficiency and reduce gas fees. However, the contract contained a critical vulnerability that allowed hackers to drain funds from users who had approved the upgrade. Although a quick rollback prevented a potential loss of $3.4 million, approximately $864,000 worth of assets were still lost. To address the situation, ParaSwap collaborated with blockchain analytics and security firms Chainalysis and TRM Labs to identify the hacker addresses and track the movement of the funds.
On April 4, ParaSwap announced the recovery of around $500,000 worth of assets, reducing the amount of unaccounted funds by 63%. The project sees providing full refunds to affected users as a crucial step towards its long-term sustainability.
In related news, a report from blockchain security firm PeckShield reveals that nearly $100 million in stolen digital assets from March hacks were successfully recovered. Despite the significant losses, 52.8% of the hacked funds were returned. Most of the recovered funds came from the security incident involving the nonfungible token (NFT) game called Munchables, which is based on the Blast network.
Overall, ParaSwap’s decision to compensate hack victims using its treasury funds showcases its commitment to addressing the issue and prioritizing the well-being of its community.