Despite facing a continuous decrease in TVL, Prisma Finance turned to its DAO for assistance in restarting the protocol. After experiencing recent liquidations, the proposal to reintroduce borrowing on Prisma was unanimously endorsed by all DAO members, demonstrating robust community support for the endeavor.
Prisma Finance formulated a strategy to resume the Prisma protocol safely following its suspension on March 28 due to an $11.6 million hack. To reinstate borrowing on Prisma, a community agreement was necessary, which was determined through a continuous voting process.
Frank Olson, a core contributor to Prisma Finance, presented a proposal on April 3 outlining a method to resume the Prisma protocol securely.
The proposal aimed to restore functionalities such as depositing liquid staking tokens (LSTs) and liquid restacking tokens (LRTs), as well as borrowing overcollateralized stablecoins.
In response to Olson’s proposal, the Prisma Finance DAO swiftly launched a four-day governance vote the next day, which will conclude on April 7. According to Olson:
“Unpausing the protocol is a critical part of the path to recovery and it will reestablish normal functionality, including complete Vault management and deposits into the Stability Pool.”
As of the latest update, all votes cast by members of the decentralized autonomous organization (DAO) regarding the proposal to reinstate borrowing on Prisma were in favor, reaching a unanimous “Yes.” This indicated robust backing from the community. Nonetheless, the final decision would be made once the voting period concluded.
As the Prisma Finance protocol geared up to potentially resume operations in the coming days, users with open positions were strongly urged to revoke their delegate approvals. This precaution was necessary as unpausing the protocol could result in the loss of funds.
Earlier, the protocol revealed that 14 accounts had not yet revoked access to the affected smart contract, potentially risking a total loss of $540,000.
Olson emphasized Prisma’s ongoing dedication to mitigating future risks through continuous auditing services, bug bounty programs, and heightened security measures.
Following a harrowing incident where an in-house developer nearly absconded with $63 million, the team at Munchables, an NFT game, devised a plan to fend off similar attacks in the future.
As part of this strategy, Prisma intended to enlist investment firm Manifold Trading, market maker Selini Capital, and blockchain investigator ZachXBT as additional multisig signers. This step aimed to ensure the secure retrieval of users’ funds.
“Finally, we will send ETH and future MUNCH donations to those who were involved in the recovery process of keeping our users safe,” the company said.
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