Decentralized finance (DeFi) platform, Platypus, is developing a compensation plan for its users following an $8.5 million flash loan attack.
The attack drained funds from the protocol, leading to the destabilization of its dollar-pegged stablecoin. In response, Platypus took to Twitter to assure users that it is working on a compensation plan and asked them not to sell their assets in the protocol as this could exacerbate the situation.
Platypus stated that it is working with several parties, including law enforcement officials, to recover the funds. It also paused asset liquidations while it dealt with the issue.
The protocol has not yet provided any further details about the compensation plan or the recovery process. However, it revealed that part of the stolen funds is locked up in the Aave protocol. Platypus is exploring options to recover these funds and will need approval from the Aave governance forum for the recovery proposal.
The attack on Platypus highlights the risks associated with DeFi protocols. These protocols offer users decentralized financial services, but they are not immune to hacks and cyber-attacks.
Users should exercise caution when investing in DeFi platforms and conduct thorough research before investing. In the event of an attack, users should follow the platform’s instructions and refrain from selling their assets to avoid further losses.
