Hackers exploit Kelp DAO rsETH bridge, $292M stolen

[el kaka22]

Just to get 1% a year more, people put more and more layers on the ETH they were staking, and it is not like they were getting rich over it neither, it was a small amount and we are talking about ETH, in the crypto world, the thing that goes up and down so much every single day, we would make 1% more in a day, with price movements.

So idea to risk this much, at a place evidently so risky, just to get this little amount of money is proof of people making bad risk/reward calculations. If you knew the risks, then you would realize that the possible rewards of this was not anywhere close to the risk that you were taking and because of this I do not understand why this would be something that wouldn't really work out well enough.

[shinratensei_]

Why would they accept rsETH as collateral anyway? AAVE has recently delisted USDS which is managed by SKY or known as MakerDAO before which also owns DAI as collateral in their project cited from this https://governance.aave.com/t/arfc-remove-usds-as-collateral-and-increase-rf-across-all-aave-instances/23426 because of increasing risk factor and then go on accepting some random restaking liquid token rsETH as a collateral.

It feels ridiculous how they considered USDS an increasing risk factor but a restaking token is not. Defi is hugely overleveraged and it's not a good thing.

[elda34b]

That's a lot of money. I wonder how many platform actually dies due to hack or something similar? If they can keep operating like normal with little to no damage to their earning, I guess that's why stuff like this keeps happening. On the other hand, it means there are tons of money in the defi space still. I'm not sure how many users actually put too much money there. It's hard to discourage them from staking and whatnot if they feel losing $10k is acceptable.

[shinratensei_]

That's a lot of money. I wonder how many platform actually dies due to hack or something similar? If they can keep operating like normal with little to no damage to their earning, I guess that's why stuff like this keeps happening. On the other hand, it means there are tons of money in the defi space still. I'm not sure how many users actually put too much money there. It's hard to discourage them from staking and whatnot if they feel losing $10k is acceptable.

Many of them died after the hack but not the kind of die that you expected such as declaring bankruptcy or other formal way of declaring that they are out of business.
After the hack, the protocols will be dying slowly. Their tvl decreasing to 0, nobody uses the protocol anymore, their coin lose its value and eventually fading slowly.

I don't know why some protocols don't want to declare bankruptcy but I'm guessing that its because the legal consequence that entails and they prefer to keep their protocol slightly alive and keep it in a limbo.
Some that are lucky to get a loan and help like what happened to AAVE with the help of DeFi united initiative will continue to operate but the one that getting the hit without the help usually becoming a dying protocol.

[OmegaStarScream]

This is the first time Arbitrum froze assets because of the hack but this is nothing new, as ETH, Tron, BNB chain has done it in the past and Arbitrum claims to have a Security Council to make this decision and Tron/Eth has done the same in the past but never heard about a security coucil overlooking these things, but they found a new term for centralization  .

The truth is you cannot trust L2 and BTCitcoin is the only decentralized coin.

Did this actually happen with Ethereum before? I might have read it, but I just cannot remember? And I don't mean Circle or Tether freezing USDC and USDT, that's a separate issues has more to do with the smart contract than the Ethereum blockchain but I'm talking about the Ethereum foundation actually have the ability to freeze any private wallet if they want to.

[elda34b]

I don't know why some protocols don't want to declare bankruptcy but I'm guessing that its because the legal consequence that entails and they prefer to keep their protocol slightly alive and keep it in a limbo.

Is there really a law that makes them goes into jail because they do that? Isn't there something on their disclaimer saying they won't be held responsible for extraordinary stuff like a big hack or something? What difference does it make if they keep the platform open yet do nothing to actually improve the situation though? I'd assume people can still bring them into court and gets them into jail.

[OmegaStarScream]

Update on the 70M $ Frozen by Arbitrum: ZachXBT is now accusing a law firm to wanting to take grab of the frozen funds to redirect them to another case against (which has nothing to do with the hack) North korea instead of the hack victims [1]. If I understood the situation correctly, I highly doubt this would hold in court in anyway.

[1] https://news.bitcoin.com/zachxbt-law-firm-lazarus-group-frozen-funds/

[asriloni]

Update on the 70M $ Frozen by Arbitrum: ZachXBT is now accusing a law firm to wanting to take grab of the frozen funds to redirect them to another case against (which has nothing to do with the hack) North korea instead of the hack victims [1]. If I understood the situation correctly, I highly doubt this would hold in court in anyway.

[1] https://news.bitcoin.com/zachxbt-law-firm-lazarus-group-frozen-funds/

That law firms basically wants the money to be seized by US government instead of to be returned back to the victim. However, your doubtfulness about this case would hold in court maybe wrong.  We have seen how US government robbed other country resource. So it's possible they are also targeting the victim funds to be used to pay the unpaid fine by US judgement against DPRK. 

[FinneysTrueVision]

That law firms basically wants the money to be seized by US government instead of to be returned back to the victim. However, your doubtfulness about this case would hold in court maybe wrong.  We have seen how US government robbed other country resource. So it's possible they are also targeting the victim funds to be used to pay the unpaid fine by US judgement against DPRK. 

rsETH holders and Aave lenders were also directly victimized by North Korea. It doesn’t make sense to take what rightfully belongs to one victim and give it to another unrelated victim.

You never know what will happen though. The US previously gave Juan Guiado control over billions of dollars in assets seized from the government of Venezuela. They have set the precedent where they can steal from anybody they consider an enemy. Then you have all sorts of people coming out of the woodwork begging for a handout.