Paying claims for the Yearn hack

The recent hack on Yearn Finance resulted in 26 claims from our members.

Nexus Mutual is exactly that, a mutual. That means our members have full discretion over whether to accept a claim or not. Community discussions primarily take place on the #claims-discussions channel in our Discord server where members tend to share expertise and opinions.

Any member can become a Claims Assessor by staking any amount of NXM. Assessing claims in line with the consensus outcome earns Claims Assessors NXM rewards, while voting against the consensus outcome results in the assessors’ tokens being locked up for a longer period than the initial stake to vote.

When assessing claims, Claims Assessors must determine whether the claimer has povided evidence that they materially lost funds in the hack (unless the cover ID is lower than #2291). To do this members could consult the list of impacted addresses here to ensure the address sent as proof had been impacted.

Claims process:

• To become a Claims Assessor any member must lock in any amount of NXM for an initial stake period of 30 days.
• Claims Assessors earn NXM rewards if they vote with the consensus outcome.
• Claims Assessors can vote once every 6 hours.
• Each claim is open for a minimum of 36 hours.
• If a claim hasn’t resolved clearly after 72 hours it is escalated to a full member vote.

Proof of loss

We introduced proof of loss in October 2020 which means that cover ID#2291 and above require proof of material loss per a signed message from the impacted address at the time of claiming. Claimants must demonstrate a material loss of at least 20% of the cover amount.

Thanks to the swift collaboration between the Yearn and Nexus teams we were able to provide our members with a complete list of impacted addresses for Claims Assessors to refer to when checking the proof of loss requirement during the claims voting process.

Stats

Total claims: 17
Total claims accepted: 14
Total claims denied: 3
Total claims with proof of loss: 2/17
Total claims without proof of loss: 15/17
Amount paid out: $2,410,499.26 USD (1,351 ETH + 129,660 DAI)
Amount of NXM burned 37,949.94
Amount of NXM staked on Yearn Finance before the first payout: 396,472.63
Amount that NXM stakers on Yearn Finance staking were burned: ~9.57% (of the amount they allocated to Yearn when staking.)

Each address exposed to the Yearn vault on Yearn Finance suffered a loss of 31.6% of their assets as a result of the hack (prior to reimbursement).

Claim number 76 was submitted in relation to cover ID #2929 which means proof of loss was required. Members voted to decline this claim because the submitted proof related to an address which was not impacted by the hack. Claims Assessors could check this against the list of impacted addresses.

Our community came together in our Discord to discuss the information about the claims, to clarify the proof of loss clause (for certain claims) and to discuss interpretations of the cover wording document.

yDAI vault restored

The Yearn team replenished the vault which reimbursed all users who suffered loss. At this point there were two claims which required proof of loss that had already been denied for other reasons. These were:

• claim #76 which did not submit valid proof of loss, and
• claim #85 which had a loss of <20% of the cover amount.

Subsequently, claim #88 was also denied.

Our community came together to respectfully discuss the details of the hack and share their expertise. There was more debate about our cover wording document which we are in the process of updating. Paying out claims is a vital part of the process of protecting our users from the risks in DeFi. We’re really pleased to see the system working as intended and will continue to develop Nexus for the long term.

For detailed and technical discussions on our roadmap use our forum.

Join our community on Discord.

For Telegram updates join the announcements channel and discussion group.

For all stats and data visit the Nexus tracker built by Richard Chen.