1inch Foundation Proposes $768,000 Reimbursement Plan

The 1inch Foundation, the organization behind 1inch.exchange, one of the largest decentralized exchange (DEX) aggregators by trading volume, has proposed a $768,000 reimbursement plan for users affected by a supply chain attack in October 2024.

However, the proposal’s strict eligibility criteria appear unusual for a DeFi protocol.

Proposal Details

Under the 1IP-80 proposal, users must:
– Complete identity verification
– Provide verifiable proof of lost funds
– File law enforcement reports
– Sign a compensation agreement

These conditions mean users who fail to meet any requirement are likely excluded from receiving compensation.

The plan calls for transferring $768,026 in USDC from the DAO treasury to the 1inch Foundation, which will manage claim verification and fund distribution. Victims must also agree to waive rights to any recovered funds, which would be returned to the DAO treasury.

Voting Status

As of press time, only 20 wallets have voted, yet 100% of the 3.3 million counted tokens are against the proposal, with voting open until June 22.

1inch has yet to respond to The Defiant’s request for comment. The DEX aggregator processes over $1 billion in daily trading volume, according to data from DefiLlama.

Context of the Attack

The reimbursement plan follows the October 30, 2024, attack, when a compromised update to the Lottie Player library on 1inch’s front-end allowed hackers to steal about $768,000 in user funds.

It remains unclear who was behind the attack, which is under investigation by the Royal Cayman Islands Police Service and blockchain forensic firms ZeroShadow and TRM Labs, according to the 1inch Foundation’s proposal.