Cream Finance token price plunges after announcement of user-reimbursement plan

The price of the DeFi protocol’s Cream Finance token fell by more than 35% after the developers announced a program to reimburse users affected by the October hack.

Among the affected, more than 1.45 million CREAM will be distributed. To do this, the project’s treasury assets and tokens allocated to the developers will be used. The latter will no longer receive allocations.

We will distribute 1,453,415 CREAM tokens to impacted users. We are utilizing remaining CREAM tokens within the treasury, and removing the project team’s remaining CREAM token allocation. There will be no further CREAM allocations to the team.

— Cream Finance 🍦 (@CreamdotFinance) November 13, 2021

Users who managed to obtain reimbursements through the Nexus Mutual and Bridge Mutual insurance projects do not participate in the program. Cream Finance noted that staking participants will continue to receive rewards — this also applies to long-term CREAM pools.

The project team will focus on developing the Iron Bank protocol (the second version of Cream Finance). The developers have tightened the token-listing strategy and set caps on collateral requirements across all markets, and begun implementing “additional monitoring and alerting” solutions.

As of writing, CREAM was trading around $56 — on November 13 the price was above $86. Before the attack, the token had traded for over $155.

The price drop is linked to an increase in supply — assets previously held by the project’s treasury and by the developers will enter the market. According to CoinGecko, 766,534 CREAM are in public circulation, though that number will now rise significantly.

Back in 2021, Cream Finance was hacked three times. In February, an unknown attacker exploited a vulnerability in Iron Bank and withdrew tokens totaling $37.5 million.

In August, the project was attacked via a flash loan. The damage amounted to 462,079,976 AMP and 2,804 ETH (more than $18 million).

On September 8, the hacker transferred most of the stolen amount to the project’s multisig wallet totaling 5,152.6 ETH.

In October, the protocol developers confirmed that they had managed to recover 5,152.6 ETH. The hacker was allowed to keep 10% of the stolen funds — about 515 ETH as a reward for the discovered bug.

In the same month, an unknown drained $130 million from Cream Finance. To do this, he used a flash loan as part of a complex transaction.

Subscribe to ForkLog news on VK.