DeFi stablecoin project Origin Finance reportedly disclosed details regarding its compensation initiative for any users experiencing financial damage from a $7 million November attack.
Specifically, the initiative is included in a larger trend from developers, users, and traders, who have witnessed entities throughout the DeFi sphere, to be increasingly showing a pro attitude towards insurance products and other exploit backstops.
In November, a flash loan attack reportedly caused $7 million in financial damage to Origin Dollar’s yield-bearing stablecoin initiative.
Following the incident, Origin Dollar product manager Micah Alcorn drafted out a plan with numerous layers, in a bid to instantly cover 75% of compensation for users’ lost funds, paid in the “audited, and relaunched with new security measures in place” stablecoin OUSD.
For bigger depositors, however, there will be more complication to finalize the payment protocol, with a 12-month time locked quantity of the e-commerce utility token OGN involved.
Hence, the possibility of these major depositors acquiring full compensation for their loss is reportedly dependent on the performance of the OGN token.
“I believe protocols (and their auditors) need to start taking responsibility for the code they push out,” he said. “Whether it is through themselves providing coverage, or reimbursing funds, this type of behavior sets a strong precedent and allows users to feel more confident in the platforms they use, which helps boost TVL, so a win-win.” Alan, a semi-anonymous core developer at insurance-adjacent ‘coverage’ protocol Cover, reportedly remarked regarding the attempt from Origin to pull more users to the space.
Previously, DeFi protocols reportedly provided users with what is equal to a “don’t risk more than you can afford to lose” disclaimer, but market advances are indicating improved protections.