Origin dollar announced a new compensation plan to compensate the users affected by the recent $7 million November exploit that we reported about in our previous altcoin news.
Decentralized stablecoin project Origin Dollar announced a new plan to compensate the users that lost more than $7 million from the exploit which was a part of a wider trend from developers, users, and traders that saw users across the DeFi space embracing products and other exploit backstops. Almost a month ago, the platform announced that its yield-bearing stablecoin project was a victim of a flash loan which ended up draining $7 million and the attack was just one example of what was been a harsh summer and fall season for most DeFi protocols after the many hacks and exploits. The Origin Dollar team is now trying to compensate the users.
In a blog post, Origin Dollar product manager Micah Alcron laid out a new plan in three phases that will immediately repay 75% of the users that lost their funds back in the “audited and relaunched with new security measures in place” OUSD stablecoin. For bigger depositors, payments should be a more complicated process that involves a 1-year timelock quantity of the e-commerce utility token OGN and whether the depositors will be compensated for their losses depends on the performance of the OGN token.
Even with the timelock, the core developer Alan says that the effort from Origin could attract new users to space:
“I believe protocols (and their auditors) need to start taking responsibility for the code they push out. Whether it is through they themselves providing coverage, or reimbursing funds, this type of behavior sets a strong precedent and allows users to feel more confident in the platforms they use, which helps boost TVL, so a win-win.”
In the past, DeFi protocols offered the users a little more than a disclaimer but market movements seem to be trending towards better protections. According to Alan, cover tripled in value locked since the users decided to cover the Pickle Finance hack. True Network which is another coverage protocol in the testnet phase and set for launch in Q1 2021 was on a tear with 60% on the month. As these coverage tools develop, Alan, thinks that developers will have to investigate launching coverage plans and include a clear exploit contingency as a core feature of Defi protocols:
“DeFi needs to set a precedent that the protocol themselves need to be held accountable if they get hacked. From what I have seen with the recent exploits, getting hacked simply means ‘Oops, we’ll patch this bug and do better next time’. […] Having an “insurance fund” really comforts users knowing that if the protocol they deposit in gets hacked, their deposits are covered.”
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