Origin Protocol Lays Out Compensation Plan Following $7 Million Flash Loan Hack
The Origin Protocol is compensating users who were affected in a November security breach. The project’s co-founder hopes the compensation plan would renew trust among users.
Decentralized project Origin Protocol is beginning to make amends and compensate victims following a security exploit. The DeFi protocol announced that it would be receiving claims from the over 700 people who suffered losses from the exploit, renewing faith in its ability to continue operating.
Making Good on Its Word
Origin explained that all victims can now send their compensation claims, laying out the processes for them to begin claiming their tokens.
Origin suffered a major setback in November, where it revealed that OUSD, its yield-generating stablecoin, had suffered a flash loan attack that drained the protocol of $7 million.
Matthew Liu, the protocol’s co-founder, added that $1 million of the $7 million in lost funds had been deposited by the protocol’s founders and employees. The team claimed not to know how the exploit happened. However, they noted a flash-loan transaction that appeared to have been the source of the attack.
The transaction seemed heavy, with a processing fee of almost 0.54 ETH. In response to the attack, Origin froze all deposits to the OUSD vault, adding that traders should not purchase the token.
Liu had added at the time that Origin planned to continue operating, suggesting that they were looking towards compensations and remediations. A few weeks later, Origin Dollar product manager Micah Alcorn unveiled a multi-tiered strategy that would allow the protocol to pay users 75 percent of their losses.
According to the plan, larger depositors would need to go through a more complicated payment process. This involved a one-year time-locked quantity of OGN, an e-commerce utility token. The token’s performance would ultimately determine whether these larger depositors would be able to get full compensations for their losses.
The Compensation Process
Per the recent post, users can claim their transactions on the OUSD application by submitting one or two Ethereum transactions. Origin explained,
“The first transaction is to claim liquid OUSD, which is available to all eligible users. This is the only transaction necessary for approximately two-thirds of users since their losses were less than 1,000 OUSD each. When this claim is submitted, OUSD will be transferred from the compensation contract to the user’s wallet and begin earning a highly competitive yield immediately.”
The second transaction will help users claim and stake OGN into Dshop and other projects in the Origin Protocol. It will apply only to users who lost over 1,000 OUSD.
Through the staking procedure, affected users can enjoy 25 percent in returns on additional OGN tokens. When the staking period elapses, the OGN will unlock and be available to users who want to withdraw or re-stake.
This article is Originally posted on CoinCentral.com
Author: Jimmy Aki