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Prisma Finance Recovery Strategy Following $11.6 Million Hack
Prisma Finance has unveiled a strategy to cautiously restart operations following a hack that resulted in a loss of $11.6 million and prompted a temporary pause of the platform on March 28.
Reinstating Borrowing Capabilities
Reinstating borrowing capabilities on Prisma hinges upon achieving consensus through an ongoing community vote.
Exploit Incident and Governance Response
On March 28, the decentralized finance (DeFi) protocol Prisma Finance was exploited to steal around $10 million worth of cryptocurrencies. The exploit at Prisma Finance was executed through a flaw in the migration zap contract, leading to a loss of approximately $11.6 million.
The stolen assets were swiftly converted to Ethereum (ETH), complicating efforts to track and recover the funds. The core functionality of Prisma Finance remained unaffected, with the issue confined to a specific component, the migration zap contract.
Emergency Measures and Governance Vote
Prisma Finance enacted an emergency pause on all trove managers in response to the breach, halting all borrowing activities. A four-day governance vote was launched by the Prisma Finance DAO, aiming to stabilize the situation.
Plans for Resuming Borrowing Activities
Core contributor Frank Olson presented a plan to safely unpause the Prisma protocol, reinstating functionalities such as the ability for users to deposit liquid staking tokens (LSTs) and liquid restaking tokens (LRTs) and borrow overcollateralized stablecoins.
Prisma Finance’s proposed measures include a reduction in protocol-owned liquidity and adjustments to stakeholder distributions to enhance security and recovery efforts.
Prisma Finance is committed to enhancing security measures through continuous auditing services, bug bounty programs, and overall security enhancements.
