Blockchain Announcements

# dForce Rolls Out Asset Redistribution Plan for its Clients After The $24.9M Hack dForce, a decentralized finance (DeFi) startup, recently hit the headlines within crypto after an attacker tried to rip its Lendf.me protocol close to$25 million. There was, however, a turnaround of events barely two days after the April 19 attack when it emerged that dForce was in process of negotiating for the return of its clients’ funds. Luckily, the hacker eventually returned all the siphoned assets and dForce is now in the process of rolling out a redistribution plan which will see its clients regain their assets.

Had the attack been successful, it would have marked the largest DeFi hack in crypto market history. The attacker leveraged some inefficiencies within lendf.me ERC777 standard together with the underlying smart contracts which saw them secure a network re-entry hence compromising this lending protocol. Despite this unfolding, dForce seems to have bounced back after conversations with the hacker, and support from crypto market stakeholders yielded fruit.

## dForce Fund Redistribution Plan

With the funds back in its custody, dForce tweeted on April 27 noting that over 90% of the funds have been distributed to users within a span of 24 hours. They went on to add that 100% of users have been made whole in the recovery. A medium post preceding this tweet had also detailed on the dForce asset redistribution plan. According to the post, dForce will rebalance portfolios based on the last contracts before the hack,

“Given that hacker was only able to exchange a few assets before returning the funds, we have elected to rebalance most of the portfolio back to the last state prior to the contract being attacked and the pausing of the contract. Users will be made whole.”

The post went on to further highlight the procedure for withdrawals, loan repayments and actions to be taken if nothing is done by a client. As for the withdrawals, dForce clients are expected to log in to the ‘Asset Recovery System’ within Lendf.me and initiate the process by accepting the terms and conditions. Otherwise, the funds will be automatically returned in a week to the original address if no action is taken.

For those who had taken out loans on Lendf.me, they are expected to honor their obligations within a week. The post notes that failure to do so will result in the sale of collateral assets to enable the lending protocol to fulfill its liquidity needs as well,

“If you have not repaid the full borrowing balance before due time, the collateral will be sold to repay the outstanding loans and the residual value (total supply — total borrow) in stablecoin will be returned to your address.”

Notably, collateral assets will be sold in exchange for stablecoins like DAI, USDx, TUSD, PAX, USDC and USDT. Apart from defaulting, a drop in collateral to loan ratio below 125% could also trigger a liquidation by dForce.

Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.