Cypher announces a solution to address the loss of funds, and will accelerate the IDO process.Cypher introduces a solution for fund loss and speeds up the IDO process.
Author: TOM BLACKSTONE, COINTELEGRAPH; Translation: Song Xue. LianGuai
Cryptocurrency trading platform Cypher has announced a plan to recover from a $1 million vulnerability and intends to “socialize” the losses of the entire platform in the initial stage of recovery. In the first phase of the plan, the Solana-based trading platform will generate “proportional redemption packages” for its current assets owned, which users can withdraw through the web interface. However, the platform currently does not have enough funds to repay all depositors, so the losses will be distributed among all accounts in the initial stage, rather than borne by any specific 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 costs. At the same time as the IDO, users will receive a “debt token” representing the remaining assets owed to them by the protocol. This debt token will grant them the right to future USDC profits generated by Cypher, ultimately enabling the losses caused by the vulnerability to be returned to users.
The team stated, “Our top priority is to allocate funds to affected users, which means we are committed to compensating them for their financial losses.” After these funds are repaid, the team will hire auditors OtterSec and Mad Shield to conduct a public audit of Cypher’s patched version, trying to identify any further errors before they become problems.
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The protocol will only be restored after “a thorough assessment has been conducted to ensure that every potential vulnerability has been addressed.” The plan states that in the meantime, the smart contracts of the application will remain frozen.
The $1 million Cypher vulnerability occurred on August 8th. The cause has not yet been determined by security researchers. The approximately $600,000 worth of cryptocurrency lost in the attack has been frozen by various centralized exchanges, preventing the attacker from cashing it out. Cypher has announced that it will attempt to recover these funds for users through cooperation with exchanges or through seizure orders issued by law enforcement agencies.
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