Defrost Finance, a DeFi protocol built on Avalanche, published a blog post on Medium today detailing the refunding process after retrieving the funds lost in its recent exploit.
According to the post, all stolen funds from V1 have been given back. Soon, the Defrost team will begin the process of returning these assets to their legitimate owners.
The platform said yesterday that the V1 hacker had refunded the stolen money. To restore items to their rightful owners, they will begin analyzing the on-chain data to determine who had them before the breach.
Today, they revealed the refunding process and key stages that will be taken over the next few days. Firstly, at the on-chain market rate, all of the ETH at the address will be converted to stablecoins, preferably DAI. Along with that, all stablecoins will be transferred from ETH to Avalanche.
Moreover, the team will examine the data stored on-chain to discover who owned what before the attack. Upon completion of the scanning process, the information will be made public.
However, the team stated that the next step is the implementation of a refunding smart contract. To the same addresses, legitimate users can request the return of their funds in stablecoins.
The Avalanche’s Protocol Hack
Early on December 23rd, the Avalanche-based protocol Defrost Finance claimed that the platform had been hacked, with an attacker taking money utilizing the flash loan feature.
The platform announced that its V2 product was compromised on December 24th. However, the next day they announced that the hacker had been able to breach the owner key of their V1 product, which wasn’t even affected by this incident initially.
The blockchain analytics firm PeckShield tweeted on December 24th They got information from the local community alerting them to Defrost Finance’s rug pull. The loss is calculated to be $12 million based on their analysis, which reveals the addition of a bogus collateral token and the deployment of a malicious pricing oracle to liquidate existing customers.
Additionally, according to DefiLlama statistics, the total amount of funds locked on the protocol had decreased to less than $93,000 on December 25th from $13.16 million following the attack.
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