Cryptocurrency trading platform Cypher has released a plan to recover from the $1 million breach, saying it will “socialize” the losses across the platform during the initial stages of recovery. In the first phase of the program, Solana-based trading platforms will generate “pro-rata redemption packages” for current assets they own, which users can withdraw through a web interface.However, the platform currently does not have enough funds to repay all depositors, so losses would be Distributed At this initial stage, all accounts are assumed, not by any particular individual or group.
In the second phase of the recovery process, the protocol will raise funds through an Initial DEX Offering (IDO), which will be used to pay for audits and further development. At the same time as the IDO occurs, users will receive a “debt token” representing the remaining assets owed to them by the protocol. The debt token will entitle them to future profits in USD Coin (USDC) generated by Cypher, allowing the protocol to eventually pay back users for losses incurred by exploiting the bug.
In response to our recent vulnerability, Cypher is fast-tracking IDO.
This is the game plan. pic.twitter.com/DFnJFvj4zD
— cypher ©️ (@cypher_protocol) August 23, 2023
“Our top priority is to direct funds to impacted users, underscoring our commitment to correcting their financial losses,” the team said. Once the funds are repaid, the team will hire auditors OtterSec and Mad Shield to patch Cypher Versions are publicly audited to try to catch any further bugs before they become problems.
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The agreement will only be reinstated “after a careful assessment to ensure that each potential vulnerability is addressed.” Meanwhile, the app’s smart contracts will remain frozen, the plan said.
The $1 million Cypher breach occurred on August 8th. Security researchers have yet to determine the cause. Around $600,000 worth of cryptocurrency lost in the attack was frozen by various centralized exchanges, preventing the attackers from cashing it out. Cypher announced that it will attempt to recover these funds for users by cooperating with the exchange or through a seizure order issued by law enforcement.
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