The company that almost broke DeFi is asking for a new beginning.
When the decentralized lending protocol bZx was hacked to the tune of some $1 million last month, some started questioning the future of decentralized finance, commonly referred to as DeFi.
On March 9, bZx co-founder Kyle Kistner published a post on the company’s website titled “Mea Culpa: A New Beginning.” The post retraces all the steps that led to the hack, with Kistner taking full responsibility for the vulnerability.
Users will not lose money
Kistner states that the protocol users will not bear any losses. Instead he writes that “the company and the protocol stakeholders are absorbing the losses.” Furthermore, the collateral that the attacker left “was liquidated into 4099.31 [Ether], which is now streaming into the iETH pool as interest.” The company will be able to service this debt for 265.14 years ‒ until 2285:
“Given the current value of the insurance fund and its annualized rate of growth, it should be more than able to cover the loss at the time it needs to be realized in the year 2285 AD.”
bZx is making changes
To make sure that in the future of the protocol is less vulnerable to cyber attacks, Kistner pledges that the company will make important changes. The company will increase the reward for its bug bounty program, as well its visibility. BZx will also be “delegating judgment to an independent panel to remove any conflicts of interest.” Possibly its most important promise is to “never deploy unaudited code, no matter how minor.”
Since inadequate price data was among the root causes of the exploit, the company will “use Chainlink to provide reference prices” because it “represents one of the best-decentralized oracle solutions on the market.”
A crypto startup owning up to its mistakes is always a welcome sight.