• Curve (CRV) token rallied 7% on Friday as a hacker began returning funds to the Curve Finance decentralized exchange (DEX).
• The hacker had stolen over $50 million from Curve Finance, Metronome and Alchemix.
• The hack has damaged investors’ confidence in the DeFi protocol, which could hamper its future TVL growth and negatively affect CRV’s price.
Hack of Curve Finance Causes Price Spike
Curve (CRV), the native token of the Curve Finance decentralized exchange (DEX) and the governance token of the Curve DAO (decentralized autonomous organization), saw its price rally 7% on Friday to $0.61 after a hacker who stole millions in funds from the exchange and other decentralized finance (DeFi) protocols began returning funds.
Hacker Returns Funds But Major Problems Remain
The hacker, who drained over $50 million in funds from Curve Finance, Metronome and Alchemix on Sunday, has now returned $8.9 million to Alchemix, as per on-chain data presented by Etherscan . While the hacker is yet to return funds to Curve Finance, it remains unclear whether a refund from the hacker can solve major problems being faced by Curve Finance. The hack exposed a weakness that revealed DeFi investor funds not to be as secure as once thought – resulting in investor capital being pulled out of the protocol – with total value locked (TVL) now standing at $2.7 billion down from $3.7 billion prior to Sunday’s hack.
Deadline Issued for Hacker To Return Funds
Curve Finance issued a 6 th of August deadline for the hacker to return the funds in exchange for a 10% cut and a promise that no criminal action will be pursued via an on-chain message. If that deadline is missed, Curve Finance has threatened that they will pursue legal action against him/her/them for their actions.
Long Term Impact On CRV Unclear
It is unclear what long term impact this incident will have on CRV’s price given that investors have been spooked by this attack and are pulling out their capital due to lack of trust in its security measures – something which could hamper its future TVL growth going forward.
Although there is hope that one of CRV’s biggest whales won’t get liquidated if all stolen funds are returned by August 6th, it remains unclear how much damage this attack has done to investor confidence towards Curve finance – something which could have major implications for CRVs outlook going forward