1inch Foundation Proposes $768,026 Compensation for October Exploit

The 1inch Foundation has submitted a new proposal to its decentralized autonomous organization (DAO) to compensate users affected by an exploit that occurred on October 30, 2024. The proposal, known as 1IP-80, outlines a reimbursement plan of $768,026 in USDC, which is the estimated value of the stolen tokens at the time of the attack. This amount will be sourced from the DAO’s treasury.

The Foundation will oversee the verification and distribution process, requiring victims to complete Know Your Customer (KYC) identity verification, provide evidence of losses, file a report with law enforcement, and sign a compensation agreement. The specific details of the KYC process have not been specified, but it is notable that 1inch does not typically require users to complete a KYC process to trade on its platform, making it a popular choice for those who prefer not to use centralized exchanges that have this requirement.

A case is currently under investigation in the Canary Islands, and victims would also need to waive their right to any funds recovered in the future. The exploit occurred when attackers compromised the 1inch decentralized application via a supply chain vulnerability in the Lottie Player library, a plugin used for animations on websites. Unlike the more recent $5 million breach of 1inch in March 2025, which saw the return of most funds through negotiations with the hacker, no restitution was previously made in the October case.

Under the proposal, the DAO would transfer the funds to the Foundation, which would process claims and disburse compensation. Victims would be required to forfeit any rights to recovered assets, which would instead be returned to the DAO treasury. As of the latest update, 30 votes have been submitted. The vote currently stands at 53.47% in favor (3.8 million votes) versus 46.53% (3.3 million) against. A single large voter wallet dominates each side, with one wallet accounting for the entire 3.3 million ‘no’ votes, while another holds 2.2 million of the 3.8 million votes in favor.

The dissenting wallet argues that the DAO should not act as an insurance fund, citing a lack of recurring revenue. The vote remains open until June 22. This proposal highlights the ongoing efforts of the 1inch Foundation to address the security breach and compensate affected users, while also navigating the complexities of decentralized governance and the need for user verification and legal compliance.