Response to Recent Hack
In response to a recent hack that resulted in the loss of 10 million ReUSD, the Resupply Protocol’s official team has put forth a remediation plan targeting the protocol’s outstanding debts. Although the specifics of the hack are not elaborated on in this document, they are accessible elsewhere. Currently, the stolen assets remain on-chain and are actively being tracked as necessary efforts are made to resolve the situation. This proposal outlines governance strategies aimed at mitigating the protocol’s bad debt and introduces retention incentives for users impacted by the hack.
Immediate Governance Actions to Address Bad Debt
At the moment, the Resupply Protocol is dealing with a significant bad debt totaling 7,131,168 ReUSD. This figure is after some compensation of 2,868,832 ReUSD from the Resupply Protocol Treasury, Convex Treasury, and C2tP. The proposal includes the burning of 6 million ReUSD from the insurance pool, which equates to about 15.5% of the 38.7 million ReUSD currently held within the pool. Consequently, this approach will lessen the burden of bad debt by $4 million compared to prior debts owed. The remaining balance of 1,131,168 ReUSD is planned to be settled through various future revenue avenues, which may involve fee contracts or potential RSUP sales initiatives that will be defined by the Governance or Finance Department in due course.
Streamlined Governance Process
To facilitate rapid resolution, the protocol is also shortening the mandatory lock-up duration for funds within the insurance pool. Consequently, the voting period for the updated Resupply proposal will now be just three days. This condensed timeline allows the decentralized autonomous organization (DAO) to expeditiously render decisions that benefit depositors, aiming for a conclusive verdict within the initial 7-day cooldown period.
Future Remediation Efforts
Moving forward with the retention plan, the Insurance Pool Retention Program is aimed at depositors who hold stakes within the insurance pool at the time of the proposal and may have suffered slashing as outlined in the first phase. The objective here is not to counteract the slashing but to motivate users to remain engaged with the insurance pool by offering additional RSUP tokens. Users are automatically enrolled but can opt out if preferred, which would redistribute the additional shares to remaining participants.
The implementation will necessitate further contract deployments, projected for a later date post-review. The program intends to allocate a total of 2.5 million RSUP tokens over the next year, principally sourced from the Treasury’s allocated RSUP budget, which will also include a portion of previously unreleased RSUP. With the insurance pool set to reduce by 6 million ReUSD, any remaining bad debts will subsequently be absorbed by the DAO. This slashing initiative aims for execution within three days following the ratification of the governance vote, with additional plans to support slashed participants forthcoming.
