After more than $ 10 million was stolen through an exploit of Rari Capital’s decentralized financial protocol, the platform creates a plan to compensate affected users.
On Monday May 10th, Rari founder Jai Bhavani wrote in a Medium post that the developers of the protocol had agreed to return the 2 million Rari Governance Tokens (RGT) intended as developer incentives for victims of the exploit. The total funding for the reimbursement is over $ 26 million.
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A distribution schedule has yet to be established. Holders of tRGT tokens can still claim a share of the stable coin reserves of the DAO, including 8.7 million RGT worth 121.8 million USD. The 8.7 million tokens make up around 1 percent of RGT’s total offering.
According to a report by CoinTelegraph, Rari is “automating income farming by rebalancing users’ funds and pools”. The official postmortem of the attack, released on Sunday May 9, stated that more than 2,600 ETH were lost. At that time, the sum corresponded to approximately 60% of all user funds in the Rari Capital Ethereum pool.
Thank you to everyone who joined the @RariCapital community call.
Jot down some notes and we will have a full record of the call soon: https://t.co/X6lUypuK63
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– Jack Lipstone @ (@JackLipstone) May 10, 2021
The official autopsy of the attack stated that an attacker had tampered with a smart contract to withdraw more money than was deposited. The hacker took out a flash loan for ETH tokens from the dYdX exchange and used ETH to make repeated deposits and withdrawals, eventually using up the $ 10 million pool of ETH tokens.
The exploit caused the price of RGT tokens to drop significantly: RGT was trading at around $ 17.40 for most of the Saturday. However, about an hour after the exploit, the price dropped to around $ 9.10. At the time of going to press, the price of RGT had rebounded to around $ 13.50.
Following the exploit, Bhavani reiterated that Rari was a “fair start” project – it had not raised any money from venture capital firms. He added that the concept of a “Rari team” has been dissolved. Instead, the protocol works in addition to the token holders with “contributors” to the protocol.
According to CoinTelegraph, Rari isn’t the only exploited DeFi platform trying to reimburse users after an exploit. Following an exploit earlier this year, the DeFi cross-chain protocol, EasyFi announced that 25% of the funds lost will be instantly distributed to users in the form of stable coins, while the remaining 75% will be distributed as IOU tokens used for EZ v2 tokens are redeemable.