Cypher Protocol, the Solana-based decentralized crypto exchange (DEX) that fell victim to a hack earlier this month, recently announced its plans to hold a public token sale. The proceeds of the initial DEX offering (DEX) would reportedly be used to repay the protocol’s users who were affected by the exploit.
Cypher recently took to X to share the token sale and subsequent repayment plan with its community:
The hack occurred on August 7, 2023, when the attacker exploited Cypher’s main contract by taking advantage of the vulnerabilities in mechanisms associated with isolated margin sub-accounts on the platform. The vulnerability allowed the hacker to more funds than they deposited, leaving the protocol with a considerable bad debt.
According to the post-mortem of the hack, the attacker drained crypto assets worth approximately $1 million from the Cypher Protocol. This included 149,205 USDC, 15,542 SOL, 14,675 jitoSOL, 8,749 mSOL, 0.9987 wETH, and 1 BONK, among other tokens. The protocol managed to get hacked crypto assets worth more than half a million dollars frozen across centralized crypto exchanges.
The Cypher Protocol came up with a three-fold approach to make the users affected by the hack whole again. The first step would be socializing losses and redeeming funds, which would involve the distribution of current assets as redemption packages on a pro-rata basis. The next step would be the IDO, wherein the funds from the token launch would be used to sustain the protocol’s development and other operational expenses.
The protocol stated that it would expedite the IDO, which was previously scheduled for the end of September 2023. The funds raised in the IDO would also facilitate audits to relaunch the protocol and establish a treasury. The assets in the redemption package would include USDC, USDT, SOL, RLB, wETH, mSOL, and several other tokens.
