zkLend Unveils Compensation Plan After $9M Hack: Affected Users To Receive Partial Fund Return
In Brief
zkLend which has recently experienced over $9 million security breach and has outlined a compensation plan for affected users.
Layer 2 money market protocol built on Starknet, zkLend which has recently experienced over $9 million security breach and has outlined a compensation plan for affected users.
Under this plan, users will either receive a full or partial refund depending on the specific pool they had deposited into. Additionally, users will be issued a Recovery non-fungible token (NFT) that represents their claim position.
For pools that were unaffected by the breach, full repayment will be made using the available liquidity within each pool. If any of these unaffected pools experience a shortfall due to higher utilization, the deficit will be covered using surplus liquidity from other unaffected pools. For the affected pools, including wstETH, ETH, USDC, STRK, and USD, any combined surplus from the unaffected pools will be liquidated and distributed proportionally to the affected pools. Partial repayments will then be made based on the remaining liquidity in each pool, along with any redistributed surplus.
The total shortfall for the affected pools is estimated at 9,396,943.69 USD. However, after factoring in the expected surplus of 383,841.97 USD from the unaffected pools, the shortfall decreases to 9,013,101.72 USD.
The project will issue Recovery NFTs to compensate users who suffered losses due to the recent exploit. Approximately 82,818 NFTs will be distributed to affected users, representing a total accumulated value of approximately $9,013,101.72.
These NFTs will represent each user’s unrepaid deposit position and will serve as a claim to the Recovery Pool—a contract where funds from various recovery methods will be gathered and made available for affected users to claim. The funds contributed to this Recovery Pool will come from several sources, including any recovered funds from the hack, all unvested team, advisor, and ecosystem ZEND tokens, any additional income and funds generated from zkLend’s ongoing operations, and any incentives or rebates received.
When And How Will Users Receive Their Claimable Amounts?
It’s important to note that zkLend’s existing protocol revenue and treasury accounts, totaling around 400,000 USD, have been excluded from the claim process and will not participate in the recovery. Should the stolen funds be recovered in the future, zkLend’s aggregate deposit position will be the last to receive compensation, after all users’ claims have been fulfilled.
Users will be able to view their claimable amounts through the Recovery Claim Portal, which is expected to be available within the next two weeks. The portal will provide detailed information about the amount each user can claim immediately and the amount that depends on the ongoing recovery efforts from the affected pools.
The actual claims process will begin once the recovery contracts have been audited. While the contracts have been built, they must undergo an audit before they can be launched, a process expected to take about two weeks.
Disclaimer
In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.
About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
