- Rari Capital founder Jai Bhavnani has revealed a compensation plan for the $9.6 million hack over the weekend
- A hacker stole 2,600 ETH from Rari Capital after exploiting some already audited code
- The user repayment will be taken from funds earmarked for the platform’s development
The founder of Rari Capital, the DeFi platform that saw 2,600 ETH stolen from the platform in a hack over the weekend, has announced the beginnings of a compensation plan. Jai Bhavnani said that 2 million RGT tokens that were planned to be set aside to scale the team would instead be used to compensate users for their losses, which amounted to $9.62 million, adding the “hard decision” was necessary to rebuild trust in the user-led platform.
Rari Capital Hacker Treads Well Worn Path
The Rari Capital hit on Sunday, following a by now well-trodden path – they took out a flash loan and used it to manipulate the price of a synthetic token on the Rari Capital platform, artificially inflating the hackers balance. The hacker then withdrew their inflated balance, leaving the Rari Capital pool 2,600 ETH short when the values resettled.
The ability for the hacker to exploit the platform through this method was not picked up by the Rari Capital developers or, more worryingly, the code auditor, Quantstamp, who audited and cleared the Rari Capital code in December 2020.
Development Funds to Be Returned
Bhavnani admitted in a Medium post yesterday that funding the reimbursement was important but was also complicated given that “we don’t have a treasury stacked with hundreds of millions of dollars.” Despite a crash in the value of the RGT token following the hack, the value of the tokens earmarked for project expansion sits at around $25.9 million, and this is where the funds will come from:
While it was indeed initially meant to scale the team, all of the protocol contributors have elected to give that 2M $RGT back to the DAO with the ask of using the newly acquired $RGT to reimburse lost funds and reward those that helped in the war room.
Bhavnani added that while the protocol had “been through a few dark days”, better times were ahead for Rari Capital:
I have no doubt that our community and protocol will bounce back harder than ever and continue shipping world changing products.