Volo, a liquid staking protocol on the Sui blockchain, has proposed the fourth update to its turnaround plan. A few hours ago, the The team said it successfully identified the culprit of the attack and contained its impact.
By Volo’s calculations, the net loss from this attack was approximately $200,000. Making the same point, the team noted: “Volo will fully offset our existing cash balance.
With plans to release “a comprehensive return to business plan,” the team assured the community that users would no longer suffer losses.
What really happened?
On April 22, a security breach stole $3.5 million in Wrapped Bitcoin (WBTC), Matrixdock Gold (XAUm), and Circle’s USDC from three vaults.
Around 50% of XAUm and WBTC holdings were sent to USDC. Taken together, the stolen funds were then bridged to Ethereum (ETH) and also converted to ETH. However, the remaining USDC was captured in time and locked, preventing hackers from stealing them as well.
Expanding on his recovery efforts, Volo added:
We managed to recover 90% of the stolen funds, which have since been converted back into stablecoins and linked to Sui. These funds are now safe with Volo.
How were WBTC, XAUm and USDC spared from further losses?
The recovered funds were placed back under Volo’s wallet addresses. In this move, 19.6 WBTCs were captured while being moved via the LayerZero Bridge.
In fact, the Volo team managed to recover these funds and have already returned them to the ETH network. In the future, this aforementioned amount will be donated to Sui under the control of Volo.
Additionally, 100.6 XAUm had previously been frozen, but with Sui’s help, it was unlocked and returned to Volo’s wallet. However, during the breach, the attacker had already sold some XAUm. Therefore, the remaining 115 XAUm will be recreated, replacing those lost, and will be returned to Volo.
According to the third recovery update, the hacker’s wallets were blocked on major platforms, and Volo froze $2 million in funds. In fact, as soon as Volo discovered the attack, the team managed to freeze compromised assets worth $500,000.
At the same time, Volo recognized and took full responsibility for the losses.
Volo is ready to absorb this loss. We will do our best not to pass this on to our users.
Measurements describing short-term tension
Since Volo was quite quick to respond to this attack, the total value locked (TVL) of the Volo protocol also saw a slight drop.
According to data from DeFiLlama, Volo’s TVL was $15.83 million on April 22, which dropped to $15.27 million on April 26. Meanwhile, the SUI token also saw a slight decline of 0.35%, as it changed hands at $0.9466 at press time.
Final Summary
- Just four days after the attack, Volo Protocol was quick enough to lock, freeze, and redirect funds to prevent further losses.
- Acting as a partner, the Sui Foundation helped Volo recover as much of the funds lost during the security breach as possible.
