Update: Insurance Fund depositors will be able to withdraw their Insurance Fund stake when the protocol goes live.
Drift’s documentation and code demonstrates that the Insurance Fund exists to maintain protocol solvency in the event of bankruptcies.
Given that the protocol was paused before losses resolved through the ordinary liquidation or bankruptcy paths, the Insurance Fund was and remains unaffected by the exploit. Users will be able to withdraw their Insurance Fund stake when the protocol goes live.
Any protocol-owned Insurance Fund assets will be allocated to support a healthy relaunch for all users. Relevant program addresses will be publicly disclosed so the community can track how protocol-owned capital is deployed.
We told our community we would find a path to recovery. This is that path.
Today’s update covers: how users will be compensated and how the exchange is being rebuilt.
All deposits into borrow/lend, vault deposits and funds deposited for trading are affected.
Unaffected:
- DSOL not deposited in Drift (including assets staked to the Drift Validator)
- Insurance Fund assets which will be withdrawn from the protocol for safeguarding
As a precautionary measure, all remaining protocol functions have been frozen and the multisig has now been updated to remove the compromised wallet
Earlier today, a malicious actor gained unauthorized access to Drift Protocol through a novel attack involving durable nonces, resulting in a rapid takeover of Drift’s Security Council administrative powers.
This was a highly sophisticated operation that appears to have involved multi-week preparation and staged execution, including the use of durable nonce accounts to pre-sign transactions that delayed execution.
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