TL;DR
- Security Breach Response: Prisma Finance proposes a recovery plan after a $11.6M hack, focusing on resuming operations with enhanced security measures and user safety protocols.
- Community Governance: The proposal has gained unanimous support in a DAO vote, with a decision pending on the re-enabling of borrowing services and deposits for liquid tokens.
- Future Safeguards: Prisma Finance is working on security upgrades, including audits and bug bounties while urging users to migrate to new vaults to prevent further risks.
In the wake of a significant security breach that resulted in the theft of $11.6 million, Prisma Finance, a decentralized finance (DeFi) protocol, has proposed a plan to safely resume operations. The exploit, which occurred on March 28, 2024, led to the temporary suspension of the protocol as the team worked diligently to address the security vulnerabilities and ensure the safety of user funds.
Following the recent event, Prisma Finance’s prominent member, Frank Olson, suggested a strategy to resume the protocol’s operations securely. The proposed method includes reopening the deposits for liquid staking tokens (LSTs) and liquid restaking tokens (LRTs), as well as re-enabling the option to borrow stablecoins that are overcollateralized.
After the proposal was put forward, the Prisma Finance DAO launched a governance vote lasting four days, which will end on April 7. Olson announced that the proposal received unanimous support from the voting members of the DAO, signaling strong approval for the return of borrowing services.
Prisma Finance’s PIP-036: A Proposal for Enhanced Security
The protocol has recognized persistent risks, noting that 14 accounts still need to withdraw from the affected smart contract, risking additional losses that could reach $540,000. To strengthen its defenses, Prisma is integrating ongoing audit services, improving its bug bounty initiatives, and executing a series of security enhancements.
The proposal, known as [PIP-036], is currently under discussion within the Prisma DAO community and aims to re-establish full functionality of the protocol, including Vault management and Stability Pool deposits.
Key Points of the Proposal:
- Safety First: The proposal emphasizes the safety of users, with measures to ensure that accounts with no open vaults revoke access to the compromised contract before borrowing is re-enabled.
- Migration to V2 Vaults: Users holding LRTs are urged to migrate from the old vaults to the new V2 vaults post-unpausing, while LST vaults will have an adjusted sunsetting timeline.
- Protocol Unpausing: The unpausing of the protocol is contingent on governance approval, with a detailed migration process and safety precautions in place.
The DAO awaits community feedback on this critical proposal, which could see an on-chain vote within 2 to 6 days, marking a significant step in Prisma Protocol’s path to recovery and future resilience.
