bEarn’s BUSD Vault compensation progress: Phase 1 — Returning the remaining balance

Dear Community, we are bringing you this article in order to address the multitude of queries and concerns regarding the BUSD vault incident. Our objective here is to shed some light on the situation and provide you with concrete answers.

Compensation Plan Progress

We will carry on the compensation within two main Phases:

Phase 1:

We have updated the interface on bVaults.Fi to allow users to take part in the first Phase (1) of compensation of the post-exploit funds. Please proceed with the following steps in order to take part in the initial compensation:

  1. Visit bVaults.Fi
  2. Connect Wallet
  3. Click the Withdraw button to claim the available balance after the countdown ends

Phase 2:

The second Phase (2) will occur on a later date once our team has had adequate time to code the compensation system for this other part of lost user funds. We will provide an ETA as soon as possible. The situation is very sensitive, with millions of funds at stake — thus we urge the community to give us adequate time to:

  • Ensure correct compensation amounts
  • Analyze the situation in detail and consider the numbers involved
  • Provide a secure method of delivery for these funds
  • Focus on blockchain transparency and protection of user trust

We must politely ask you to remain patient until we are able to present you with a reliable timeframe.

Situation Breakdown

If you have not yet read our previous article we highly encourage you to do so at this time in order to stay updated on the details given thus far. You may also consider the report on this incident written by PeckShield if you are interested in the technical details of the exploit.

To summarize the current financial situation (post-exploit):

  • 10,859,319 BUSD were stolen by the intruder directly from the BUSD vault protocol. This amount is completely unrecoverable due to the fact that the culprit already transferred the funds to another network using a bridge service.
  • In addition to the above, a further amount of 7,079,929 BUSD in exploited funds has been withdrawn by 65 user wallets which have been recorded. Users withdrew extra funds during the brief moment of attack before we were able to swiftly disable the interface. In addition to this, some users have also called the emergencyWithdraw function to withdraw funds. The actions done by these wallets has severely increased upon the initial damage done by the intruder. Adding up to a total of about ~$18 million dollars.
  • As of the time of writing, the DAO Fund contains a combined value of various assets totaling ~$6,757,447.

Given the situation at hand. We must be forward and honest in saying: we do not have the financial capacity at present time to immediately compensate for this massive loss of funds for the victims of this exploit. Yet, we are proposing using a combination of the remaining DAO funds, as well as the future salaries and operation fund of the Team to compensate the user losses.

Voluntary Return of Extra Withdrawal

We understand that many users took out excess funds without ill intent, and simply out of concern for their balance. In another case, there may be some users out there regretting their action due to a lapse in moral judgement. For these two scenarios — we humbly request that the community return any excess claimed BUSD funds to the following compensation contract address which will be directly used to compensate the remaining victims of the exploit:

0x63d7cb51977a2a85cd2aa64b72f6325a3238179b

Compensation Concerns

Many users are reporting that their Phase (1) compensation balance does not match the balance shown in farm.army. Please keep in mind — this link was only provided as a convenience to address user anxiety in regard to the $0 balance being shown in the BUSD vault. The actual compensation balance is computed from the snapshot we took prior to the occurrence of the incident. Furthermore, the balance does not include the compounded earnings accumulated since the deposit(s) made. If you read into the technical explanation of the exploit, you may also understand that the protocol has been running all this time with a faulty ratio between BUSD and ibBUSD, which would account for some further deviation from the balance shown in farm.army. Lastly, the calculation of the compensation is purely based on the total of your initial balance deposited in the vault prior to the incident. The breakdown is exactly as follows from the previous article:

Please note that if you have a withdrawal balance for Phase (1) not exactly matching the 87.5% initial compensation figure of BUSD — then this means the remaining funds must be distributed for your case in the future Phase (2). This is due to the variation in how some users’ funds were affected by the withdrawal made by the (A) intruder and (B) other users who have withdrawn excess exploited funds.

Understanding the Calculation for Compensation

We take into account all user balance left (Total Deposit subtracted with Total Withdraw). Then, we account for those who withdrew excess funds. Leaving a balance of: 97,918,968 BUSD. Then we have ~78,000,000 BUSD remaining which we get back from Alpaca. We distribute that ~78M BUSD to the victims affected pro rata to their remaining balance. This method is the fastest way to distribute 78M BUSD. We understand that it may be unfair for those who have stayed in the vault for a long time with compounded earnings — but because all users in the vault have lost funds, we believe this is the best available option at this time.

Treatment of Individual Support Cases

If you have read and understood the above, and still believe that there is truly some discrepancy with your received compensation, please know that it is the full intent of the team to compensate a total of 105% of your initial deposit as promised. If you believe you were wrongly compensated or your compensation amount deviates severely from the above details please use the following form to submit a support case. We will cross check your TX deposit history and deal with your case on an individual basis. Given this option, please allow a larger time frame for the team to process (a likely overwhelming) surge of support cases.

About bEarn Fi

bEarn Fi is a cross-chain product in Decentralized Finance (DeFi) that at its core provides yield generation, algorithmic stablecoin, gaming aggregation, cross-chain bridge, treasury, lending, DEX, yield calculator, lottery, NFTs, and governance on multi-chain: Binance Smart Chain blockchain (BSC) and Ethereum blockchain.

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