- Radiant Capital reopens lending and borrowing markets on Arbitrum following a security breach resulting in a $4.5 million Ethereum loss.
- The successful recovery from the security incident underscores the platform’s commitment to user safety and confidence, highlighting the importance of continuous vigilance and robust security practices in decentralized finance.
Radiant Capital has successfully reopened its lending and borrowing markets on Arbitrum following a meticulous security review conducted by OpenZeppelin, independent Ethereum researchers, and white hat experts. This decision comes in the aftermath of a significant security breach that resulted in the loss of $4.5 million worth of Ethereum. The Radiant DAO Council, after comprehensive analysis and resolution of the breach, decided to unpause market operations, implementing additional safeguards to fortify security protocols and prevent future incidents.
In a recent announcement, Radiant Capital assured users that they are now free to engage with all available lending and borrowing markets. The company is gradually reintroducing native USDC, subject to additional reviews to ensure the highest safety standards. To address any potential financial discrepancies resulting from the pause, Radiant Capital disclosed plans for a Snapshot proposal. This proposal aims to outline the methodology for repaying excess debt and fully recapitalizing the Arbitrum WETH market, with users set to vote on the proposed plan shortly.
Radiant Capital outlined specific measures to ease users back into resumed operations. The liquidation bonus, initially set at the lowest level of 1 basis point (bps), allows for a grace period for users to improve health scores. This measured approach aims to provide users with an adjustment period before gradually returning to normal liquidation bonus levels over the next 24 hours.
An analysis conducted by Chaos Labs, as referenced by Radiant Capital, indicated that the total collateral at risk of liquidation amounted to less than $100,000. The impact of this risk is further mitigated by the 1bps bonus, minimizing potential losses for users. Radiant Capital remains committed to transparency and user protection, emphasizing the importance of these additional security measures in fortifying their platform against potential vulnerabilities.
It’s noteworthy that the security breach, as revealed by the blockchain security company PeckShield Inc., occurred when a hacker exploited a time window during the activation of a new market in the lending platform, which was forked from popular platforms like Compound and Aave.
The breach highlighted a known rounding issue in the current Compound/Aave codebase, contributing to the vulnerability. Radiant Capital promptly acknowledged the hack, temporarily halting Arbitrum markets and initiating a comprehensive security review to address the root cause and enhance platform resilience. The successful reopening of operations underscores Radiant Capital’s commitment to security and user confidence in the aftermath of unforeseen challenges.
Radiant Capital Overcomes Security Breach: Arbitrum Markets Resume Operations
Radiant Capital’s prompt and thorough response to the security breach showcases a commitment to user safety and platform resilience. The collaboration with security experts, the implementation of additional safeguards, and the transparent approach to financial reconciliation demonstrate a proactive stance in mitigating risks.
As the lending and borrowing markets on Arbitrum reopen, users can navigate with confidence, guided by the platform’s phased measures, including a minimal liquidation bonus. Radiant Capital’s ability to swiftly address and recover from the incident underscores the importance of continuous vigilance and robust security practices in the dynamic landscape of decentralized finance.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
