After more than a month of being attacked by lightning loans, Harvest Finance finally put into practice the compensation plan for users. On December 7, the agreement was launched on the claim website, and damaged users can receive USDC, USDT and GRAIN tokens to reduce losses.
GRAIN is a new currency issued specifically for compensation. Harvest officially stated that it will continue to repurchase GRAIN from the market with 0.5% of the total issuance of the governance token FARM, and provide liquidity support for this new coin on Uniswap.
The compensation is for a security incident on October 26. Harvest was stolen by a lightning loan attack of approximately 33.8 million U.S. dollars, which caused some users to suffer losses. Whether they can recover most of the losses depends on the price of GRAIN tokens.
The new currency issued by Harvest was quickly launched on Uniswap. The opening price of GRAIN was about US$0.21. As of 3pm on December 8th, GRAIN had fallen to US$0.12. At this price, the damaged user can only get back 18.5% of the loss.
As a one-stop DeFi mining platform, the biggest feature that Harvest promotes is “saving worry”. It can automatically help users track and respond to different mining projects, save gas fees, and perform certain adjustments on the mining projects. audit. As a result, users who pursued “saving worry” shouted “too pit”.
A compromised user told Honeycomb Finance that he no longer trusts Harvest. According to data from Ouke Cloud Chain, as of December 8, Harvest’s total lock-up volume has shrunk by nearly half compared to before the attack, and a lot of funds have been lost. The attacked Harvest was unsafe, and the way it issued cheap bonds to compensate users made it unpopular.
Harvest issued new coins to compensate users
On December 7, Harvest Finance, a one-stop income farming DeFi platform, launched the claims portal to compensate users who suffered losses due to a lightning loan attack a month ago. According to data released by Harvest, the attacker has returned $2.48 million to the deployment contract, which reduces the user’s damage to 15%~13.5%.
Harvest wants to compensate users previously affected by USDC, USDT and GRAIN tokens. On the official claim website, after the damaged user has logged in, he can receive two stablecoins, USDC and USDT, and GRAIN.
A Harvest Chinese community administrator revealed to Honeycomb Finance that the compensation is calculated based on the snapshot of user assets in the block before the lightning loan attack. Each compromised user can receive 7.39% of USDT and USDC and 92.61 according to the amount of loss. %GRAIN. Taking the loss of 100 USD as an example, users can receive about 7.39 USD stablecoins and 92.61 GRAIN.
The former is “hard currency” and accounts for a minority; while the latter is a newly issued asset that accounts for the majority of claims. Therefore, whether users can recover most of their losses in the end depends on the price of GRAIN.
According to the official introduction, GRAIN is a “repurchase token”. Soon after the hacking incident, the community voted on GRAIN. The community voted for 0.5% of the total issuance of the governance token FARM to continue to be used from The market repurchases GRAIN and provides liquidity support for this new coin on Uniswap.
In addition, the community also voted for incentives for the GRAIN/FARM Uniswap trading pair. This will enable holders of FARM and GRAIN to lock up and mine on Uniswap and obtain more FARM.
At that time, the impaired users could not predict how much the price of this new coin would eventually reach. In theory, only when it reaches the price of $1, the user can recover the actual loss. Of course, Harvest officials cannot guarantee it, but it believes that establishing a liquid trading pair is the “preferred” because it enables GRAIN holders and buyers interested in the annualized income of GRAIN farming to directly trade, rather than necessary. Take long-term holding of GRAIN as the only option.
In other words, this incentive for liquid mining can help increase the market demand for GRAIN, and theoretically alleviate selling pressure.
This plan is also the final “answer sheet” that Harvest gives users. Since the lightning loan attack on October 26, the entire Harvest community has been greatly injured and lost about 33.8 million US dollars, accounting for about 3.2% of the total locked-up volume (TVL) in the agreement before the attack. The price of the governance token FARM has also It fell rapidly from US$253 to US$153, and continued to fall to a trough of US$115 within 4 days.
After the attack, Harvest issued a document acknowledging that the attack was caused by a technical error and would be responsible for it; it also provided the attacker with a refund reward, hoping that he would return the funds, but the attacker finally chose to ignore it.
After more than a month of voting and discussion, the compensation plan was finally released and implemented. Can GRAIN help investors recover their losses as much as possible?
Insolvent users bluntly say “too pit”
According to the real-time collection data of GRAIN, as of 3 pm on December 8, 203 addresses have received GRAIN, and the claim progress is about 1/3 completed.
Prior to this, GRAIN had launched UniswapV2 and opened the GRAIN/FARM trading pair. As of 3pm on December 8th, GRAIN quoted at US$0.12, which is 42.8% lower than the opening price of US$0.21.
At this price, if the user loses $1,000 due to the attack, the user can receive 73.9 USD stablecoins and 926.1 GRAIN. The total value of GRAIN is approximately US$111.13, and the user received a total of US$185 in claims, which is far from the actual loss of US$1,000.
“Definitely not satisfied,” the compromised user “Porter” told Honeycomb Finance that he deposited about $60,000 in assets for mining before Harvest was attacked, and lost about $7,800. Now after receiving the compensation, I still have a loss of 6,000 US dollars, which is “too bad.”
Financial blogger CryptoApprentice is also a compromised user of Harvest. After seeing the compensation plan, he also posted his dissatisfaction on Weibo, saying, “The team is not responsible at all.”
In this regard, the Harvest Chinese community manager told Honeycomb Finance that they will continue to repurchase GRAIN at the market price through repurchase robots until all losses are compensated.
According to this statement, if the user does not sell after receiving the GRAIN, the price needs to rise to $1 to compensate for the loss. At the market price of US$0.12, an increase of 733% is required.
Some users revealed on social platforms that they have sold GRAIN. Their trust in Harvest has dropped sharply, and some people even think that DeFi is not as safe as mainstream centralized exchanges.
According to data from Ouke Cloud Chain, Harvest is currently the 11th DeFi protocol on the TVL on Ethereum. Before the attack, its TVL had topped 1.1 billion U.S. dollars. After the attack, the lock-up value had shrunk to 333 million U.S. dollars. After more than a month of buffering, its TVL rebounded to 560 million U.S. dollars, which is almost halfway compared to its peak period.
“Porter” bluntly said that he didn’t want to play DeFi anymore, and he suffered a lot. Indeed, since the beginning of this year, the DeFi wave has rapidly swept the blockchain industry, but hacker attacks have occurred frequently, and many protocols such as Value DeFi, Origin Protocol, and bZx have been “patronized” by hackers. Technical vulnerabilities have become a big obstacle to the development of DeFi, and the confidence and enthusiasm of users to participate has also been greatly reduced.
In such a big environment, Harvest first fell to the safety line, and did not provide satisfactory results in the later settlement of claims. TVL’s highlight moments are gone forever. Behind the loss of lock-up value is the collapse of hearts and trust. .
