The development team behind Bunny Finance and Qubit decided to disband the protocol and turn it into a decentralized autonomous organization (DAO).
In a white paper released on Friday, the Bunny Finance team announced that an exploit on Qubit that resulted in $80 million in losses made it impossible for the team to operate at full capacity. Thus, they decided to dissolve the protocols and devolve powers to the community.
As Cointelegraph previously reported, Qubit’s X-bridge facilitated the exchange of tokens from Ethereum (ETH) to Binance Smart Chain (BSC). The hacker behind the attack managed to exploit a “logic error” in the X-Bridge smart contract that allowed them to withdraw tokens on the BSC chain without depositing them on Ethereum.
pic.twitter.com/G1WOMglVUU — Qubit Finance (@QubitFin) January 28, 2022
The hacker managed to steal 77,162 qXETH worth $185 million and use it as collateral to borrow multiple assets from $80 million worth of loan pools. Borrowed tokens included 15,688 $37.6M Wrapped Ether (wETH), 767 BTC-B ($28.5M), $9.5M Stablecoins, and PancakeSwap (CAKE), Pancake Bunny (BUNNY) and MDX in the amount of $5 million.
Related: Wormhole Token Bridge Loses $321M in Biggest Hack of 2022
The official announcement noted that in the future, the community will be responsible for making important decisions, including renewing contracts and changing the compensation structure. In order to change the protocols to DAO, the development team closed the vaults on Bunny, which will no longer mint their own token. The team is also closing leveraged Farming Vaults and Single Asset Vaults on Qubit that were used to borrow assets.
The development team has also decided to ditch the core fee structures by banning withdrawal fees and compounding interest. The team will also launch a new market on Qubit and get rid of the old model that has been hacked. All team tokens will be locked in the community smart contract and the profit from the contract will be used as a compensation pool. Existing team members will participate as DAO members.
