DeFi Startup Votes To Fully Reimburse Hack Victims With $26,000,000 Allocation

Decentralized finance (DeFi) startup Rari Capital has voted to allocate roughly $26 million in reimbursements following a hack that cost them 2,600 ETH, or about $10 million.

Rari Capital, which offers a suite of products offering optimized yield vaults and lending pools, was the victim of a hack over the weekend.

The attackers took advantage of unseen weaknesses in the code that integrated their Ethereum mining pool with cross-chain DeFi platform Alpha Finance’s ibETH token.

In a statement, Rari Capital chief Jai Bhavnani has unveiled a plan to make their users whole.

Bhavnani notes that since the company never received any money from venture capitalists, finding a way to compensate the victims of the hack isn’t exactly easy.

“It was a hard decision on how to proceed here, given we don’t have a treasury stacked with hundreds of millions of dollars.”

Bhavnani says that prior to the attack, the company had set aside 2 million of their governance token, RGT, with the original purpose of scaling the team. These tokens can instead be used for reimbursements, says the Rari Capital chief.

“While it was indeed initially meant to scale the team, all of the protocol contributors have elected to give that 2M RGT back to the DAO (decentralized autonomous organization) with the ask of using the newly acquired RGT to reimburse lost funds and reward those that helped in the war room.

This should be more than enough and the DAO can keep the remaining tokens. We chose to do it this way as we believe that the token holders should choose the path forward and we wanted to provide the resources to give them as much flexibility as possible.”

The exact distribution of all reimbursements is being discussed by Rari Capital’s community and developers, but the 2 million RGT amounts to $23.11 million at time of writing.

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Source: https://dailyhodl.com/2021/05/11/defi-startup-votes-to-fully-reimburse-hack-victims-with-26000000-allocation/