DeFiance Capital Saves $13.3M That Was On The Verge Of Being Stolen.

DeFiance Capital founder Arthur Cheong not only lost $1.7 million in NFTs and crypto in a phishing assault, but a second wallet was also compromised. The hacker took more than $720,000 in Lido tokens from the second wallet and had the potential to steal much more, but it was stopped.

On Tuesday, it was revealed that DeFiance Capital founder Arthur Cheong was the victim of a phishing attempt after opening a fraudulent link in an email. His personal cryptocurrency wallet was hacked, resulting in the loss of $1.7 million in NFTs and cryptocurrencies.

What was not mentioned was that a second wallet was also hacked, resulting in the firm losing more than 200,000 Lido tokens ($720,000).

Worse, it included a further 3.7 million vested Lido tokens worth $13.3 million, which were being unlocked and drained from the wallet on a regular basis.

The vesting, on the other hand, provided some relief. Even though the hacker had access to the staked Lido tokens, they were unable to sell them all due to a ‘linear vesting’ contract.

Linear vesting is a mechanism in which a crypto protocol retains assets for a set period of time and then releases a little amount with each subsequent block.

Only a tiny amount of Lido tokens were unlocked, and it appears from the wallet’s transaction history that the hacker was steadily selling them.

In an attempt to stop the bleeding, a representative from DeFiance Capital known as ‘jacob.defiance’ issued a governance proposal to the Lido DAO community through voting platform Aragon. As discussed on Lido’s governance forum, they advocated burning the vested Lido tokens and minting them in a new wallet under the management of the fund.

On Wednesday, members of the Lido DAO voted to approve the plan, after which the team burnt the whole amount of vested tokens. The tokens will now be restored to the control of the fund.

So, while the fund lost more than $2.42 million, it protected an additional $13.3 million from being taken, which is a modest silver lining.

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Patrick

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