Curve E-DAO closed governance token rewards for multiBTC, crvCRVETH, Arbitrum Tricrypto, alETH, msETH and pETH pools.
Curve Finance, a prominent lending protocol, has recently taken decisive action in the wake of two significant cryptocurrency exploits in July.
On August 2nd, a Curve E-DAO member, Gabriel Shapiro, announced the termination of governance token rewards for specific liquidity pools impacted by the recent exploits.
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The termination was conducted by the Curve Emergency decentralized autonomous organization (Curve E-DAO), a specialized committee within the Curve DAO governing structure. This committee's actions directly affected pools such as alETH+ETH, msETH-ETH, pETH-ETH, crvCRVETH, Arbitrum Tricrypto, and multibtc3CRV.
When commenting on the decision, Gabriel Shapiro revealed that the emergency DAO has removed these rewards to “avoid incentivizing further participation in these compromised pools.”
The first incident on July 6th involved a withdrawal of over $100 million from various bridges in the Multichain protocol. After the Multichain team describe these transfers as "abnormal," Curve team warned its users about potential risks linked to its multibtc3CRV liquidity pool.
The second, a reentrancy attack on July 30th, targeted Curve Finance and resulted in a loss of over $47 million in crypto. The attack directly affected pools created using the Vyper protocol.
Despite the gravity of these exploits, affected pools continued to generate Curve DAO (CRV) governance token rewards, meaning users could still deposit tokens to earn CRV.
The recent action by the Curve E-DAO aims to mitigate further risk by ceasing these rewards. It is important to note that the decision can be changed with the Curve DAO vote.
The recent actions by the Curve E-DAO come amid a concerning wave of hacks and scams in the cryptocurrency landscape. Other notable incidents in July include Alphapo's alleged loss of over $60 million and zkSync's $3.4 million loss.
Curve's emergency response, encapsulated in the termination of rewards for the affected pools, signifies a robust commitment to security and governance. By taking prompt and targeted measures, the Curve community has demonstrated a willingness to adapt and respond to challenges, reinforcing the importance of vigilance and proactive risk management in the dynamic cryptocurrency landscape.
