Curve DAO (CRV) The community behind the protocol agreed to pay $44 million in compensation to the victims of the July hack. Compensation will be in the form of Curve’s CRV tokens.
DeFi exchange Curve Finance suffered a major attack in July, where $61 million was stolen from multiple Ethereum trading pools. The attack didn’t just affect Curve; It also hit NFT lending protocol JPEG’d and DeFi lending platform Alchemix.
Although a significant portion of the stolen funds were recovered, liquidity providers (LPs) continued to suffer serious losses due to the activities of trading bots. The attack caused panic, causing $1.5 billion to be withdrawn from several Curve pools and leaving LPs facing significant shortfalls.
Liquidity providers play a very important role in exchanges like Curve. To trading pools cryptocurrency By supplying them, they enable other users to trade on the platforms. In return, LPs are rewarded with token emissions, a share of fees, or both.
In the first stage, the locked CRV compensation of $44 million will be gradually distributed to the victims on a linear basis over the course of a year. This is because the funds were withdrawn from the DAO’s Community Fund, whose contract imposes a minimum one-year vesting on CRV tokens withdrawn from the pool.
Over the one-year linear vesting period, 196,626.29 CRV tokens will be issued per day, which will be equivalent to approximately $121,000 in daily CRV emissions based on the token’s current spot price.
However, because CRV is a volatile asset, LPs have no guarantee that they will be fully compensated at the end of the vesting period, at least in dollars.
*This is not investment advice.
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