THORChain Treasury will cover affected users but correct the damage for only about $4.9 million in Ethereum
As AZCoin News reported decentralized, liquidity protocol THORChain suffered a $7.6 million exploit. However, the damage figure has been revised to around $4.9 million. And users affected by yesterday’s hack will be fully compensated.
THORChain tapping treasury to repay $5 million in Ethereum after the attack
Currently, these are being reviewed. They said they had a recovery plan in place, allowing for flexibility, but still a period of time where the network can be brought online for UTXO chains, with ETH halted until stabilized and solvency addressed.
The protocol promised via Twitter that users affected by a $5 million hack yesterday would be fully compensated.
The only entity that will wear the burden will be the THORChain treasury, approx $5m will be used to donate to ETH LPs.
This is the purpose of the treasury during Chaosnet, to insure the network funds.
— THORChain #ACTIVATETHESYNTHS⚡️ (@THORChain) July 16, 2021
The exploit was announced with initial reports estimating the size of the hack at around 13,000 ETH ($24 million), before this was revised to around 4,000 ETH ($7.4 million), and then later to around $4.9 million. The funds taken were in ether and Ethereum-based tokens.
When the attack was noticed, nodes running the network halted it, preventing the attack from getting worse. The threshold to halt the network is a third of the 38 nodes running it. Since the bug was found, THORChain’s developers have already put out a fix and are encouraging node operators to update their software.
The team announces a full post-mortem of the exploit is coming. In the meantime, it has been said that the attacker was able to trick the protocol’s bridge to the Ethereum blockchain, known as ETH Bifrost (in keeping with the Norse mythology theme), that they had transferred in ETH when they hadn’t.
According to Thorchain, liquidity providers or LPs are the only users affected.
“The attacker paid huge slip fees, approx $1.4m was captured by nodes, with further $1.4m by ERC20 LPs. Only users affected are ETH LPs, and they will be made whole. So despite the exploit, Nodes, LPs and Arbers will stand to profit considerably,” said the project’s official Twitter account.
It’s not the first time Thorchain has been attacked. In late June, an attacker made off with $140,000 in Ether and ERC20 tokens after a logic error in the ETH Bifrost. Thorchain says after patching and restarting the network, treasury funds will go back into the ETH liquidity pool.
RUNE price | Source: CoinMarketCap
At press time, RUNE price is still down nearly 18% on the day, trading at $4.04.