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Sentiment Protocol to Reimburse Users 100% of Funds Lost to Exploit

Published 04/08/2023, 06:35 AM
Updated 04/08/2023, 07:00 AM
Sentiment Protocol to Reimburse Users 100% of Funds Lost to Exploit

  • Sentiment liquidity protocol announces 100% reimbursement for users.
  • A hacker stole $1.09M worth of USDC, USDT, FRAX, and Ethereum tokens.
  • However, 90% of the funds have been returned after negotiations.

In an exciting turn of events, the Sentiment liquidity protocol has announced today on Twitter that users affected by a recent exploit in the protocol will be reimbursed 100% of their lost funds.

Notably, the fund recovery was facilitated by a group of independent contributors, with Sherlock covering $49,275.77 in USDC and an additional $16,425.26 pending from Nexus Mutual, bringing the total insured amount to $65,701.03.

Additionally, the Sentiment team negotiated the return of 90% of the funds misappropriated from the hacker. The team also decided to use internal treasury to provide the difference of the recovered funds to make users whole.

On April 4, 2023, the Sentiment protocol suffered a hack resulting in the unauthorized extraction of user funds. The exploiter manipulated a Balancer LP token and exploited the Sentiment protocol to borrow against a maliciously inflated asset price, leaving their Sentiment account with approximately $1,092,191 of bad debt.

The hacker stole $463,920, $363,303, and $125,804 in USDC, USDT, and FRAX stablecoins, respectively — including Ethereum tokens worth over $152,938.06. However, after negotiations, the exploiter returned 90% of the funds misappropriated, totaling $872,724.60.

The recovery process will see the funds in the ETH mainnet moved to a multi-sig on Arbitrum and exchanged for the equivalent of the debt assets. Then, Wintermute, a well-known market maker, will initiate an on-chain transaction to liquidate the bad debt account. After completion, users will once again be able to deposit funds and borrow assets.

The post Sentiment Protocol to Reimburse Users 100% of Funds Lost to Exploit appeared first on Coin Edition.

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