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ParaSwap Hack Updates: DAO Approves Recovery Fund for Victims


DeFi aggregator ParaSwap is taking decisive action to support users affected by a recent contract vulnerability. On April 6, 2024, the ParaSwap DAO approved a proposal to compensate victims of a March 2024 hack. The compensation will come from their treasury funds.

The vulnerability discovered in the Augustus V6 contract led to the loss of user funds. While white hat operations recovered a significant amount, some users remained affected.

ParaSwap’s Road to Recovery

On the day of the exploitation, March 20, 2024, ParaSwap took immediate action, pausing its API and removing V6 contracts. The white hat recoveries managed to secure a total of $3.4 million plus reduce any future ParaSwap users from being affected.

However, the vulnerability still affected two categories of users. The first category includes pre-white hat victims, who lost a total of $24,000. The second category comprises post-white hat asset depositors, who lost approximately $340,000.

Following a detailed investigation and recovery effort, ParaSwap published a proposal on April 4 to request a grant from the DAO to help refund users whose funds were not recovered by white hat actions.

“In the future, the [ParaSwap] Foundation will share the next steps needed by affected users to receive the compensation if they are eligible for it,” ParaSwap said in their official statement.

Besides the ParaSwap incident, the DeFi and crypto spaces experienced several hacks in March. One of the most notable hack incidents was Prisma Finance, which resulted in a loss of $11 million.

Total Stolen Value in Q1 2024. Source: Cyvers

Furthermore, a recent report from Cyvers disclosed that the total stolen value in the first quarter of 2024 is nearing $739.7 million.

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Conclusion

In conclusion, the DeFi aggregator ParaSwap responded swiftly to a contract vulnerability that resulted in the loss of user funds. The ParaSwap DAO approved a proposal to compensate victims of the hack, using treasury funds to cover the losses. While white hat operations were able to recover a significant amount of the funds, some users were still affected. ParaSwap took immediate action to pause its API and remove the vulnerable contracts. A detailed investigation and recovery effort were conducted, leading to a proposal for compensation to users whose funds were not recovered. This incident underscores the importance of security measures in the DeFi space, especially as crypto and DeFi hacks continue to be a prevalent issue in the industry.

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