1inch Foundation proposes a $768K exploit compensation through a DAO governance proposal.
The exploit on 1inch interface occurred due to a vulnerability in the Lottie Player library.
Users seeking compensation need to meet strict requirements including providing transaction hashes, KYC verification, police report, and waiving future claims if funds are recovered.
The Foundation will manage user verification, law enforcement communication, and USDC distribution.
Stolen assets, if recovered later, will be returned to the DAO and not to compensated users.
1inch's infrastructure is designed to handle such operations and emphasizes 'regulatory compatibility.'
1inch's compensation terms are unconventional for DeFi, involving centralized verification and legal formalities.
The impact of these terms on the voting process and user acceptance is yet to be determined.
Monitoring the outcome of this decision will provide insights into the future approach of users in the crypto, blockchain, and DeFi space.