Mango Markets will take a snapshot of the funds held by the victims one hour before the hack and repay them in the same proportion.
Last week, the Solana-based decentralized finance platform Mango Markets faced a major exploit losing $114 million worth of investors’ funds. The attackers had managed to manipulate the Mango collateral and took out massive loans from Mango’s liquidity pools.
In the latest development, Mango Markets has decided to pay back the victims of the hack. The DeFi platform will use a snapshot of balances an hour before the hack. Mango Markets presented this motion in its Discord community call on Monday. Once the DAO has been published, it will have 72 hours to vote on the proposal.
Avraham Eisenberg, the self-proclaimed digital art dealer admitted to being the person behind the hack. He also defended his actions stating that were “legal” and the brainwork of a “highly profitable trading strategy”. Eisenberg stated:
“I believe all of our actions were legal open market actions, using the protocol as designed, even if the development team did not fully anticipate all the consequences of setting parameters the way they are.”
Over the last weekend, the Mango Markets Community decided to allow Eisenberg to keep $47 million and return the rest of $67 million. Mango Markets said that the returned stolen funds will be used to pay back the victims of the hack.
Mango Markets’ Repayment Strategy
In the Discord channel, Mango Markets co-founder Daffy Durairaj said that one of the major goals behind the repayment strategy is to minimize the difference in tokens the victims had before the hack and what they are having today.
Mango Markets will settle all perpetual futures or borrowed funds at the time of the snapshot. Besides, it will also convert the Profit and Loss (PNL) to USDC. After that, Mando markets will go through each token it has in its Treasury from the least to the greatest. It will pay back the borrowed amounts in the same order. To calculate the total repayment, Mango Markets will use the price of the towns when paid to the users.
Furthermore, to minimize the price impact and volatility for users, Mango Markets will distribute tokens with a smaller balance first. They will pay the MANGO tokens at the last since its price has collapsed more than 50% after the hack.
Over the last year, hackers in the DeFi space have turned very active. Also, as per Chainalysis, October is leading for the most crypto funds stolen in a single month in 2022. As of October 12, the total number of hacks has resulted in $718 million in funds lost this month.
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