Recently hacked bEarn Fi reveals compensation plan for users PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Recently hacked bEarn Fi reveals compensation plan for users

Recently hacked bEarn Fi reveals compensation plan for users PlatoBlockchain Data Intelligence. Vertical Search. Ai.

Last Sunday, $10.85 million worth of Binance USD was drained from one of the vaults of cross-chain decentralized finance (DeFi) yield farming platform bEarn Fi as it fell victim to an exploit on its smart contract.

In response, developers of bEarn assured reimbursement and additional compensation for all users affected by the exploit. The team behind the protocol said they would “create a compensation fund” from the combination of the remaining saved funds, Dev Fund, DAO Fund, and fees it generated in operation.

The compensation plan will ultimately result in getting back 105% of their losses through various tokens where 87.5% of initial deposits’ amount in Binance USD and 7.5% in BDOv2 will be given immediately. Meanwhile, 10% of the affected user’s deposits will be reimbursed with BDEX tokens but will only be available 80 weeks from now because of the ongoing vesting process.

May not be the best time for compensation

While the compensation plan sounded like music to the ears of affected bEarn users, some argue that the timing of reimbursement almost immediately after the hack may create “distorted perception risk” for DeFi users and devalue insurance protocols.

Banteg, a pseudonymous core developer at Yearn Finance, said, “Promising a full compensation just a few hours after a hack seems to become a common theme.” It is also hurting the adoption of insurance protocols, according to the developer.

About the exploit

The exploit on bEarn Fi’s smart contract allowed the malicious attacker to continuously deposit and withdraw Binance USD from the affected vault, receiving more coins than what was initially deposited every single time.

Investigation revealed the attacker first made a $7.8 million BUSD loan from another DeFi protocol – Cream Finance. After this, the bEarn’s vault was bombarded with a constant stream of in/out transactions.

It took the attacker 26 transactions to drain out the $10.85 million worth BUSD from the vault.

 

Image courtesy of Cointelegraph News/YouTube

Source: https://bitcoinerx.com/blockchain/recently-hacked-bearn-fi-reveals-compensation-plan-for-users/

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