Resupply developer donates $1.4m after protocol suffers $9m exploit

A developer at Resupply, the stablecoin lending protocol that suffered a $9.3 million exploit earlier this week, has donated $1.4 million of his own money to help pay down the protocol’s bad debt.

C2tP, who made the donation, is a pseudonymous developer for Resupply as well as Convex Finance, an Ethereum-based protocol that boasts more than $1 billion in user deposits.

“C2 just did this from his own pocket,” Winthorpe, one of Resupply’s pseudonymous co-founders, said on Discord, linking onchain records of the donation.

“He didn’t have too and shouldn’t have in my opinion, but it’s the kind of person he is.”

The donation has spurred hope that the protocol could eventually recover and return funds to Resupply’s impacted users.

On Thursday, an attacker used a bug in Resupply’s code to steal funds from the protocol using a $200,000 deposit.

In response, Resupply assured users that only one of the protocol’s liquidity pools had been affected, and funds deposited to other parts of the protocol were still safe.

That didn’t stop users from withdrawing their funds. Resupply’s deposits fell $58 million in the aftermath, to $78 million.

While many Resupply users have praised C2tP’s donation, some stakeholders are also questioning how the project has responded to the exploit.

Mounting criticism

Wang Yishi, founder of crypto hardware wallet Onekey, is one of many users to criticise the protocol team’s response.

He said he deposited “millions” of dollars to Resupply’s insurance pool to earn yield, and disagreed with the protocol’s decision to tap into insurance pool funds to cover the exploit losses.

“There is no DeFi precedent where an insurance pool covers damage from a bug caused by the protocol team,” he said.

An insurance pool is a fund that is set aside by DeFi protocols to cover losses from hacks and exploits.

Michael Egorov, co-founder of decentralised exchange Curve, stepped in to defend Resupply and its developers.

He said the exploit was “not the easiest thing to spot,” and argued that the insurance pool is specifically designed to cover exploit losses.

Resupply partly relies on Curve a decentralised stablecoin exchange, but has no connection to the Curve team. Resupply’s success contributed to the growth of Curve’s stablecoin, crvUSD, and its affiliated lending protocol, LlamaLend.

Resupply said it will release a post-mortem of the exploit as soon as a complete analysis of the situation has been conducted.

Disclaimer: The two co-founders of DL News were previously core contributors to the Curve protocol.

Zachary Rampone is a DeFi correspondent at DL News. Have a tip? Contact him at zrampone@dlnews.com.