Technology

Fei Proposal Not to Make Whole Hack Victims’ A New Low For DeFi’

Hacks have plagued the cryptocurrency space over the years. Hacks that happen on a protocol are the most devastating because they cause millions of losses for traders. With these hacks, there is always a question of how users will be compensated or how the protocol will recover lost funds. For instance, the Acala stablecoin was hacked recently, where almost 2 billion aUSD tokens were erroneously minted by a hacker. The team swiftly responded to burn the minted tokens before the hacker could redeem them, which allowed aUSD to reattain its peg and minimize investor losses. However, not all cases are the same. The Fei protocol was hacked on April 30 via a reentrancy attack. $80 million worth of tokens were lost following the event. Nearly four months after it happened, the protocol’s founder has come up with a recovery plan that has elicited mixed reactions from the community. The Fei protocol seems to be ready to shut down its doors. However, the proposal tabled to reimburse the victims of the $80 million hack has been heavily opposed by the early investors. The proposal plans to partially repay the victims of the hack and compel the Fei holders to redeem their tokens for the DAI stablecoin.

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