Crypto

CREAM Finance takes two big plunges in one month after hack and inflation

Cream lost over $260 million in funds in the second-biggest hack to date. The post CREAM Finance takes two big plunges in one month after hack and inflation appeared first on Bankless Times. ...

For the second time in less than a month, the price of CREAM Finance’s token fell off a cliff. CREAM is a DeFi money market and lending service, whose coffers were drained after an attack at the end of October, CoinDesk wrote.

First plunge: Cream lost over $260M

In the devastating exploit, Cream lost over $260 million in funds, making it the second-biggest hack to date. The majority of Ethereum-based pools were emptied, leaving a $40 million $CREAM pool. Cream’s Ethereum markets were worth $300 million just four days earlier.

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According to DeFillama, Cream has another $460 million in TVL across Fantom, Avalanche, Binance Smart Chain, and Polygon, but those funds could be at risk as well. The attack was most likely in the form of a flash loan in a complicated transaction that used up more than 9 ETH in gas and involved 68 different assets.

The hacker made away with around $130 million in various cryptocurrencies. About a third of this amount could be in illiquid crETH, which might prove hard to sell, being a staked ETH derivative.

Second plunge: the road to hell

Unlike many similar protocols, Cream came up with a compensation plan. They published the following post on their Medium page yesterday, Saturday 13, 2021:

We will distribute 1,453,415 CREAM tokens to impacted users. We are utilizing remaining CREAM tokens within the treasury, and removing the project team’s remaining CREAM token allocation. There will be no further CREAM allocations to the team. Impacted users can claim their CREAM tokens from https://app.cream.finance/claim at this time. This claim process will be available for 1 year from the time of this post.

We’ve all heard about where good intentions lead and Cream’s is a case in point. According to CoinMarketCap, only 150,000 of Cream’s 9 million outstanding coins are in circulation. Such a quick increase in supply of coins in circulation inevitably affected demand.

Coping with the losses

After the announcement, the price of Cream’s token dropped from around $88 to just over $50, gaining slightly thereafter. At the time of writing, Cream is trading at $56.

What’s more, most of the lost funds were in Ether and other well-established cryptocurrencies. Investors weren’t thrilled about being paid back in Cream even if inflation hadn’t been an issue.

In every event, even the smallest compensation is better than nothing.

The post CREAM Finance takes two big plunges in one month after hack and inflation appeared first on Bankless Times.

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