Radiant Capital, a prominent cross-chain lending blockchain, has initiated the process of debt repayment following a significant flash loan exploit that resulted in a loss of $4.5 million earlier this month. The company has successfully made its first repayment, a substantial amount of 1,190 Ether, equivalent to $2.6 million. This payment marks a critical step in addressing the remaining 720 ETH ($1.6 million) of bad debt.
This move comes as part of Radiant Capital’s strategy outlined in the RFP-27 proposal, which gained overwhelming support from nearly 73% of its users. The proposal, passed on January 8, suggested utilizing funds from the Radiant DAO Treasury, which held $5.2 million, and the protocol’s monthly revenue of around $500,000, to repay the debt.
Radiant’s team emphasized the importance of this repayment plan for maintaining the protocol’s integrity and ensuring users have unrestricted access to their deposits. The goal is to completely offset the bad debt within the next 90 days using Operational Expenditure (OpEx) funds, with the potential to tap into DAO reserve funds for quicker liquidity.
The initial exploit occurred on January 2 on Radiant’s USD Coin lending pool on the Arbitrum network. An attacker capitalized on a rounding issue in Radiant’s code, resulting in a cumulative precision error. This flaw allowed the attacker to repeatedly deposit and withdraw funds for profit. Beosin, a blockchain analytics firm, identified the root cause as a vulnerability commonly found in new markets of lending platforms similar to Compound/Aave. The exploit led to a loss of 1.3% of Radiant’s total value locked at the time.
Radiant Capital’s proactive approach in managing this crisis demonstrates its commitment to security and user trust, highlighting the challenges and resilience within the blockchain finance sector.