Warp Finance, a protocol enabling liquidity provisioning (LP) tokens to be used as collateral for stablecoin loans, is re-launching after a successful recovery and reimbursement of hacked funds.
This novel platform was the unfortunate victim of a flash loan attack, an increasingly prevalent problem in the decentralized finance (DeFi) space whereby hackers are able to essentially cheat the protocol and pull large amounts of money out of it. Warp carried out a quick and sweeping response to this hack, both re-securing its platform and re-obtaining user funds, which have been reimbursed.
In order to ensure that it is protected against future flash loan attack attempts, Warp Finance sought a security review from n-Var to thoroughly audit its reworked code. The main objectives were to identify resolutions for the flash loan attack, as well as to ensure the security of updates to Warp’s price oracles. The n-Var security audit meticulously reviewed Warp Finance’s price oracle, particularly regarding how it determines the value of LP tokens. The identified fix to this issue was to switch from Uniswap price oracles to Chainlink price oracles. The price-determination calculations themselves were also optimized. The result is the correct valuation of LP tokens and protection against future similar flash loan attacks.
Furthermore, through quick and effective action, Warp was able to reobtain the majority of the lost funds and return them to users – 75% of the affected $7.76 million worth of stablecoin, or the equivalent of $5.82 million. In order to make up for the remaining losses, Warp Finance is offering its new Portal IOU token. The total supply of the Portal IOU token will be 7,760,241, so that 1 Portal IOU token is redeemable for 0.001449697206 Warp Token. This token will be awarded to users who deposited stablecoin funds that have not been fully recovered. Portal IOU tokens will be exchangeable for Warp Tokens, with the capacity for receiving bonus Warp Tokens (backed by 7.5% of the total Warp Token supply) if users wait until the end of the six-month vesting period to redeem. Alternatively, users will be able to freely trade the Portal IOU Tokens on Uniswap, where it can maintain its redeemable value, offering an additional means for value generation.
To ensure community confidence in their new security measures as well as overall satisfaction with the design of the Warp Protocol, Warp has also opened the opportunity for users to test and perform community reviews of the platform. These reviews will involve comprehensive user feedback.
Warp Finance accomplished an incredibly efficient and sweeping recovery in the wake of the flash loan attack. With these new measures in place, Warp Finance was able to resume full operations within a very short time span, continuing to benefit its users by providing them with stablecoin loans in exchange for LP tokens.
For more information on how Warp Finance provides value to its users, visit their website at warp.finance.
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