Developers of SafeMoon Protocol revealed that the firm has reached an agreement with the crypto hacker to return 80% of the stolen funds to the platform.
According to the agreement specifics, which were highlighted on Twitter, 80% of the liquidity pool (LP) will be returned to the SafeMoon platform, with the remaining 20% used as a white hat bounty for the hacker.
Furthermore, SafeMoon has opted not to pursue charges against the hacker as the company believes it is the best move for the platform and its customers after a careful assessment of the circumstances of the incident.
Details of the Hack
SafeMoon announced in March that its LP was hacked, resulting in a loss of approximately $8.9 million Binance Coin. At the time, Blockchain security firm PeckShield hinted that the hacker took advantage of an upgrade that may have accidentally introduced a “public burn bug” into the platform.
PeckShield confirmed that the exploiter used a code function to fraudulently raise the price of SafeMoon (SFM) tokens. He subsequently completed a sale of sufficient tokens to the LP in the same transaction to effectively remove WBNB from the contract.
How SafeMoon Protocol Works
The SafeMoon Protocol is a decentralized finance (DeFi) token that runs on the Binance Smart Chain (BSC).
The aim of the protocol is to build a more stable and durable cryptocurrency by incentivizing the holding of tokens and minimizing volatility through its redistribution and deflationary processes.
Negotiations Between Protocol Developers and Hackers Increase
In recent times, there has been a surge in hacking DeFi protocols and negotiating to keep some funds. For example, the attacker who had stolen over $200 million from Euler Finance has returned almost all the funds and even apologized.
Ultimately, negotiations may help to limit the amount of money lost in a hack, which can benefit both the protocol developers and their users.
Consequences of Striking Deals With Hackers
While discussions with hackers may be viewed as a strategy to lessen the damage caused by an attack and recoup some of the stolen assets, it’s important to note that negotiating with hackers can send the wrong message and incentivize more hacking attempts.
Therefore, it is critical that protocols emphasize security and invest in effective security features to prevent and respond to attacks and exploits.
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