Resupply Proposes $6 Million Insurance Plan for reUSD Loss
- Resupply’s insurance covers a $6 million reUSD loss.
- Remediation involves an insurance pool and protocol revenues.
- Controversy over insurance use prompts industry debate.
The decision marks a significant move as it uses insurance funds for protocol-related issues, sparking debates within the ecosystem.
Sections of the community have expressed concern about Resupply’s decision to cover $6 million of the reUSD exploit losses using their insurance pool. Michael Egorov, co-founder of Curve, noted the complexity of identifying the exploit early.
“The exploit was ‘not the easiest thing to spot,’ and argued that the insurance pool is specifically designed to cover exploit losses.” – Michael Egorov, Co-founder, Curve
Key figures like Wang Yishi opposed the insurance fund’s usage, arguing a lack of precedent for such coverage.
Financial impacts of the incident were profound, with $10 million reUSD becoming bad debt within the protocol. Resupply’s plan includes burning $6 million from their insurance pool and using future revenues to address remaining debts. Retention rewards are included for affected users.
Resupply’s decision affects both the DeFi sector and related token ecosystems, especially those linked to the Curve platform. The compromise plan includes expedited governance voting, ensuring quick resolution and compensation pending community approval.
Due to the unprecedented use of insurance reserves for handling protocol failures, the decision could have long-term impacts on protocol governance and insurance standards. Data from past exploits in similar contexts could provide insights into future market responses to such incidents.
