Hundred Finance Shuts Down, Finalizes Compensation Plan for Hack Victims

Hundred Finance, the multi-chain lending protocol, has officially ceased operations nearly four months after suffering a significant hack.

Incident Overview:

• Hack Details: As previously reported by Coin68, Hundred Finance was attacked on April 15th, resulting in a loss of $7.4 million. The hack was attributed to a manipulative action where the hacker donated 200 WBTC, inflating the exchange rate of hWBTC and subsequently draining the lending pools with a minimal amount of hWBTC (2 wei).
• Immediate Response: Following the incident, the project team attempted to negotiate with the hacker to recover the stolen funds.

Community Vote:

• Voting Results: From July 26th to August 9th, a community vote was held where 4.9 million veHND (99.07% of the votes) supported halting the lending services of Hundred Finance and compensating the hack victims.

Compensation Plan:

• Current Treasury Distribution: The project acknowledged that the current assets are insufficient to cover all losses. With DAO approval, the following assets will be distributed directly to the victims:
  • 1.1 million USDC (immediate distribution).
  • 391,811 ARB (immediate distribution).
  • 191,449 OP (distribution dependent on governance vote by OP token holders).
  • Velodrome veNFT (to be auctioned off, with proceeds distributed to victims).
  • Any recovered assets from the hacker will also be distributed.

Financial Impact:

• Token Price Decline: The price of HND has dropped significantly, falling an additional 5% in the past 24 hours.
• Total Value Locked (TVL): The TVL of Hundred Finance has seen a significant reduction as the project winds down.

Platform Background:

• Infrastructure: Hundred Finance was built on the Optimism layer 2 network. The project had previously faced security issues on Gnosis, leading to a temporary halt in operations across all chains.

Broader Crypto Context:

• Market Conditions: The closure of Hundred Finance is indicative of the harsh conditions in the current crypto winter. Recently, other projects like SpiritSwap on the Fantom network and Saddle Finance have also announced shutdowns due to various challenges.

The shutdown of Hundred Finance and its compensation efforts reflect the ongoing difficulties faced by DeFi projects in maintaining security and trust within the ecosystem. The community-driven approach to asset distribution aims to provide some relief to the victims of the hack while marking the end of Hundred Finance’s operations.