In an attempt to recover funds from last week’s hack, DeFi platform Mango DAO has chosen to take the settlement route. The settlement enables them to recover more than 50% of the stolen funds, but as a result the hacker gets to keep $47 million.
The Mango hack was one among a series of DeFi hacks that have unfolded this year. The Binance Smart Chain was exploited less than a week ago. The blockchain Mango runs on, Solana, was also attacked in August this year. Due to the exploit, Mango lost $100 million of user funds.
The Solana-based platform, which enables the trading of digital assets for spot, margin, and perpetual futures, has a Decentralized Autonomous Organization (DAO) to make such decisions.
After the settlement came through, the hackers returned $67 million, in accordance with the terms of the deal. The news was confirmed by Maximilian Schneider of Mando DAO, via a messaging platform, to Bloomberg. It was also subsequently shared on Twitter.
$67M in various crypto assets have been returned to the DAO. Let’s meet up on Monday 3 PM UTC on the Mango discord to discuss, how we can sort out this mess.
— Mango (@mangomarkets) October 15, 2022
The settlement was wrapped up on Saturday after days of tense negotiations between the hacker and Mango officials. The hacker had posted a settlement proposal in the app’s governance forum soon after the hack. Mango has a bad debt that resulted from a bailout executed by Mango Markets and Solend in June 2022. The hacker had demanded Mango use the 70 million USDC in its treasury to pay off this bad debt. The proposal/demand was not approved by a majority of the platform’s token holders.
The Mango team then made a counter proposal to hackers letting them keep 50% of the heist and returning the rest of the amount with no criminal proceedings. In the words of the second proposal: “Within 12 hours of the proposal opening, you shall send back the assets other than USDC, MSOL, MNGO, and SOL as a show of good faith. The remaining assets shall be sent within 12 hours once the vote is complete and passes.”
A vote is expected to be conducted later this week to decide how the $67 million that has been recovered will be distributed to users. A Tweet by Mango from 15 October 2022 reads: “We computed every account’s equity in USDC and plan to reimburse as much as we can using the DAO treasury (subject to vote) and whatever tokens we’re able to recover.”
