Mango Markets proposes plan to compensate hack victims

The team behind the Solana-based trading and lending DeFi platform Mango Markets has put to a vote a plan to compensate victims of the attack with $116 million. The Block reports.

Participants DAO will have 72 hours from the plan’s publication on Discord to vote.

If approved, victims of the hack will be eligible to recover the amount they held as of one hour before the incident (totaling $114 million).

The platform will use a snapshot as of October 11, 16:19 ET. Based on it, all borrowed funds will be calculated, and gains and losses will be converted into U.S. dollars.

Then Mango Markets will audit every token it holds in its treasury, from smallest to largest, and return the borrowed amounts in the specified order. The price of the assets paid to users will be used to calculate their total repayment.

This algorithm will help limit price impact and volatility for users. The MANGO token will be paid last, as its price has changed significantly since the snapshot.

Duffie Durai Raj, co-founder of Mango Markets, noted that the proposed plan aims to minimize the difference between the tokens users had before the attack and the coins they receive.

On October 15, a certain Abraham Eisenberg admitted involvement in the hack. In an interview with The Block he described himself as a digital art dealer, noting that “I did nothing illegal”.

Shortly before that, the Mango Markets community approved a deal with the hacker for $47 million. Eisenberg will return $69 million and keep the remaining $47 million as a reward.

Under the agreements, all victims will receive full reimbursement from treasury funds and will waive any potential claims and criminal charges.

As reported, the Mango Markets hack occurred on October 12. It was attributed to oracle price manipulation.

On the same day, the CEO of the cryptocurrency exchange FTX, Sam Bankman-Fried commented on the Mango Markets incident. According to him, the attacker was able to withdraw funds not due to faulty price oracles, but due to weaknesses in the risk-management framework.

October became a record month for the amount of cryptocurrency stolen by hackers in 2022, according to Chainalysis. Since October 1, DeFi protocols have lost $718 million across 11 attacks.

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