TerraCVita, a validator on the Terra Classic (LUNC) blockchain, recently announced on X, the finalisation of a compensation package for the victims of the 2023 Terraport hack.
This development comes after months of discussions and planning following the incident that resulted in losing $4 million worth of user assets.
Just finalising the proposed @_Terraport_ compensation package for affected users from last years hack. 🙏
— TerraCVita (@TerracVita) March 18, 2024
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Compensation Not Refund: A Key Distinction
TerraCVita emphasized that the initiative will provide compensation, not refunds, to the affected users. This distinction underscores the team’s stance that the Terraport platform itself wasn’t directly responsible for the stolen funds.
While specific details regarding the compensation structure remain undisclosed, TerraCVita has revealed some aspects of its approach. The team highlights prioritizing users who actively reported the incident to authorities and are collaborating in ongoing recovery efforts.
TerraCVita acknowledges the need for additional resources to execute the compensation plan. One potential funding mechanism involves raising fees on the Terra Classic-based Terraport decentralized exchange (DEX). However, the team acknowledges the potential drawback: higher fees could make Terraport less competitive compared to other DEX platforms.
Alternative Funding Strategies and TERRA Price
Despite the potential drawbacks of fee increases, TerraCVita remains committed to exploring this option alongside alternative funding strategies. A potential positive development could be a rise in the price of LUNC, the native token of the Terra Classic ecosystem.
At the time of press, according to CoinMarketCap, LUNC is trading at $0.0001417, with a 9% price upsurge in the last 24 hours.
The Terraport hack in April 2023 targeted the platform’s liquidity providers (LPs). Estimates suggest total losses amounted to 15 billion LUNC. The perpetrators laundered the stolen funds through centralized exchanges, including MEXC, KuCoin, and Binance.
We are on twitter, follow us to connect with us :- @TimesTabloid1
— TimesTabloid (@TimesTabloid1) July 15, 2023
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Community Collaboration and Legal Action
Following the hack, community members played a crucial role by identifying and reporting suspicious activity on centralized exchanges. These efforts, combined with investigations by law enforcement, led to the freezing of some stolen assets. Additionally, the TerraCVita team had planned to lock up $2 million of the on-chain traced funds, but the community rejected the proposal.
The announcement of a compensation package represents a significant step towards restoring trust and supporting affected users. While full details regarding the compensation structure and timelines are still emerging, TerraCVita’s commitment to user well-being is a positive development for the Terraport community.
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