Web3 is Going Just Great

Balancer co-founder Fernando Martinelli has said he strongly considered shutting down the protocol entirely, but ultimately decided to continue the project as it generates a relatively small amount of revenue. Instead, the project will move to being operated by a DAO and operating company, which Martinelli hopes will allow them to dodge "real and ongoing legal exposure" and "the liability of past security incidents".

Although another Balancer co-founder has optimistically presented this as "the start of a better chapter" for Balancer, it remains to be seen whether a skeleton crew will be able to revive the project.

While the exploit left the Venus Protocol with over $2 million in bad debt, it's not clear if the attacker even made money from the exploit. The exploiter's position was ultimately liquidated, collapsing the increase in THE price. However, it's possible the exploiter took advantage of the price discrepancy elsewhere to profit.

The Venus Protocol has had a number of issues in the past — notably in June 2023, when the team developing the BNB Chain had to intervene when the a thief borrowed $150 million on Venus against stolen tokens and then faced liquidation.

The Aave founder offered to refund the user the $600,000 in fees collected from the transaction, and acknowledged "there are additional guardrails the industry can build to better protect users".

According to Gondi, the exploiter took advantage of functionality that allowed users to sell their NFTs to automatically repay loans.

Gondi has said it has reimbursed customers by buying them "comparable items" from the same collections as their stolen NFTs, although it seems questionable that this will satisfy customers who purchased products whose whole selling point is that they aren't interchangeable.