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ParaSwap Hack Updates: DAO Approves Recovery Fund for Victims

2 mins read April 8, 2024

ParaSwap DAO has agreed to a proposal to compensate victims of the AugustusV6 contract breach from its treasury. Recovery efforts and progress updates. The ParaSwap DAO community has agreed to use the funds in its treasury to compensate hack victims. The proposal was submitted by the ParaSwap decentralized autonomous organization (DAO) on April 4, bringing the idea of using the funds to refund the AugustusV6 contract victims.

ParaSwap DAO agrees to compensate victims The community came to a consensus three days later with about 96.81% of the voters in favor of compensating the victims affected by the hack.

The Result of the vote on the ParaSwap community. Source: vote.paraswap.network The ParaSwap AugustusV6 contract, which was proposed to reduce gas fees and increase swapping efficiency, was launched momentarily on March 18. However, there was a slight vulnerability in the upgrade that allowed hackers access to it, draining funds from the accounts of users who approved it. Although the platform was able to deploy a soft rollback to block an excessive loss of about $3.4 million, the hackers were still able to cart away with more than $864,000.

After the hack, the ParaSwap Foundation released a statement saying that it is in communication with analytics firm Chainalysis and TRM Labs. The statement noted that the Foundation was working with the platforms to identify the hacker’s wallet address and trace the movement of the fund. Furthermore, the foundation promised to cover the funds linked to the breach including communications with authorities, payments for contract re-audits, and the process involved in refunding.

Recovery efforts and progress updates On April 4, the Foundation released an update noting that they have been able to recover about $500,000 of the stolen funds. The foundation clarified that even though the total stolen funds at the time were not properly accounted for, they have recovered 63% of it.

Fund Recovery Update:
Following the work done both by our core team and partners, approximately $500k worth of assets have been recovered from a hacker who had misappropriated the most funds.

Thanks to this rescue, the amount of funds still unaccounted for – which comprise users…

— Velora (formerly ParaSwap) (@VeloraDEX) April 4, 2024 According to the platform, refunding users affected by the breach is the right step towards the platform’s sustainability. Hackers did not generally experience a high degree of success in getting away with stolen funds in March. According to data from blockchain security platform PeckShield, more than $100 million stolen via hacks were recovered last month. While the total accumulated stolen funds were in the millions, around 52% of them were recovered. In its data, the platform noted that most of the recovered funds were tied to funds stolen from Munchables, a game developed on the Blast network.

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Owotunse Adebayo

Adebayo is a writer with four years of experience in the crypto space. He graduated from the University of Lagos where he studied Urban and Regional planning. Adebayo has worked at Tokenhell and CryptoTicker, writing cryptocurrency and Fintech news. He is currently a news contributor with Cryptopolitan.

ParaSwap launches intent-based protocol to curb MEV attacks

Bybit has requested a refund from ParaSwap DAO for swap fees paid by a hacker, sparking a governance debate over ethical responsibility.

Cryptocurrency exchange Bybit wants ParaSwap DAO to return over $90,000 in Ethereum (ETH) in swap fees tied to the $1.46 billion theft, sparking debate in the decentralized finance community over a move that could set a legal precedent.

Bybit asked to return 44.67 ETH from the Paraswap DAO that Bybit hacker paid in SWAP FEES.

This decision has ethical and legal responsibilities against the DAO and sets a precedent for the wider DeFi ecosystem (notably Thorswap).

I'm a Paraswap DAO delegate but still split on… pic.twitter.com/gz83dk6whR

— Ignas | DeFi (@DefiIgnas) March 4, 2025 In an X post on March 4, prominent defi analyst Ignas, who’s also a Paraswap DAO delegate, said that the exchange asked to return 44.67 ETH from the ParaSwap DAO “that Bybit hacker paid in swap fees.”

“This decision has ethical and legal responsibilities against the DAO and sets a precedent for the wider DeFi ecosystem (notably Thorswap).”

Ignas

The analyst notes that Bybit is a major player in the space, adding that returning the funds could help avoid “legal headaches.” However, there’s still a catch, as returning the funds could set a precedent.

“Code is law. The DAO earned the fees legitimately via smart contracts. And if funds are returned now, what about future cases? Sets a dangerous precedent. And at the end of the day, Bybit’s poor security (I know Safe UI was compromised, but still) led to the hack.”

Ignas

The analyst suggest a middle ground, leaning towards returning most of the fund “minus 10% Bybit official bounty.”

Bybit’s CEO Ben Zhou earlier revealed that nearly 20% of the stolen funds are now untraceable, just less than two weeks after the exchange lost over $1.4 billion in a highly sophisticated attack by North Korea-backed hackers.

ParaSwap rebrands to Velora, introduces intent-based DEX trading feature

Velora Rebrand Introduces Intents-Based Trading To Enhance DeFi Execution

Barter Co-Founder Nikita Ovchinnik on Liquidity Without Lockups and What DeFi Needs Next

PANews reported on September 16th that, according to The Block , the cross-chain trading protocol Velora (formerly ParaSwap ) has officially launched its new token, VLR . Effective immediately, PSP will lose its governance, staking, and rewards functions. Starting September 16th , users can migrate PSP , sePSP1 , and sePSP2 to VLR at a 1:1 ratio, gas -free. The migration window will be open for at least one year, and those migrating before December 16th will receive additional VLR rewards. VLR utilizes a unified staking mechanism and a rewards mechanism tied to protocol revenue, marking a comprehensive upgrade of Velora's governance and brand. Velora's cumulative trading volume has exceeded $ 125 billion, with monthly trading volume reaching $ 7 billion in August .

SEC Drops Long-Running Investigation Into Aave Protocol

TLDR Aave Labs submitted a brand control proposal without the original author’s consent, escalating DAO governance tensions. The AAVE price has dropped 18% in one week, including 4.75% in one day. Ernesto Boado disavowed the proposal submission, criticizing the rushed timeline and lack of prior notice. Aave Labs replaced ParaSwap with CoW Swap, redirecting $200K/week in fees from the DAO to company-controlled addresses. Founder Stani Kulechov purchased 84,033 AAVE worth $12.6M in a week, currently facing an unrealized loss of $2.2M. In our recent report, Blockonomi revealed the ongoing misunderstanding between Aave Labs and the DAO over protocol ownership and governance. The tension escalated after Aave Labs submitted a brand control proposal to Snapshot without the original author’s consent.

Boado Disavows Vote Submission by Aave Labs A recap of what really happened, as per our report, reveals that Ernesto Boado, co-founder of BGD Labs, publicly rejected the vote, stating, “This is not, in ethos, my proposal.”  He confirmed that Aave Labs submitted the draft without notice and objected to the rushed timeline during the holidays.

The proposal sought to transfer ownership of key assets like aave.com, GitHub, and social accounts to a DAO-controlled entity.  Boado clarified that he would not have approved the current version or timing of the submission.  Stani Kulechov, Aave’s founder, responded by defending the vote’s legality under the DAO’s governance process.

Earlier, Aave Labs replaced ParaSwap with CoW Swap, shifting $200K/week in fees from the DAO to itself. Delegates said the change lacked approval and diverted revenue generated through the DAO’s liquidity.  Aave Labs argued the frontend remains separate and voluntary contributions were never guaranteed.

AAVE Price Drops to $152 According to the latest CoinMarketCap data, AAVE price is currently trading at $152.49, representing a 4.75% decrease over the last 24 hours. The AAVE price has shown a consistent downward trend throughout the day, with a brief recovery failing to hold above $154. The chart indicates a peak near $161, followed by a steady decline.

Source: CoinMarketCap The market cap has also dropped 4.75%, now sitting at $2.33 billion. Trading volume, however, rose 34.59% over the same period, reaching $708.52 million. The volume-to-market capitalization ratio is currently 30.44%, indicating increased short-term activity.

AAVE’s fully diluted valuation stands at $2.43 billion, while total value locked (TVL) is reported at $33.74 billion. The market cap-to-TVL ratio is 0.06928, indicating a disparity between token value and protocol usage.

Stani Kulechov Accumulates 84K AAVE, Faces $2.2M Unrealized Loss Despite the ongoing saga and AAVE price dip, a post on X by Lookonchain reveals that Stani Kulechov executed multiple AAVE-related transactions through Gnosis Safe and CoW Protocol. He purchased a total of 32,660 AAVE, valued at approximately $5.15 million, at an average price of $158. The transactions include inflows and outflows involving WETH and AAVE, routed via settlement contracts.

Stani Kulechov(@StaniKulechov), the founder of @Aave, bought 32,660 $AAVE($5.15M) at $158 again 7 hours ago.

He has bought a total of 84,033 $AAVE($12.6M) at an average cost of $176 over the past week, currently sitting on an unrealized loss of $2.2M.https://t.co/HEXO1r7uQK pic.twitter.com/k0pWQCmwGr

— Lookonchain (@lookonchain) December 23, 2025

He received 935.234 WETH from CoW Protocol and transferred 48.793 WETH back, equaling about $147.7K. Other transactions show repeated movement of WETH and Aave Labs tokens between wallets linked to him and the protocol. One entry indicates 569.329 AAVE moved from CoW Protocol to Stani Kulechov’s Gnosis wallet.

Over the past week, Stani accumulated a total of 84,033 AAVE, valued at $12.6 million, at an average cost of $176. Based on the current AAVE market price, his position shows an unrealized loss of approximately $2.2 million.