Resupply Proposes 15.5% Insurance Pool Burn to Address 10 Million reUSD Hack

Resupply has released a Recovery Plan Proposal following a recent hack that resulted in 10 million reUSD becoming non-performant. The proposal, which is open for a 3-day voting period, outlines a strategy to address the bad debt issue. The stolen funds remain on-chain, and Resupply is actively monitoring the situation and taking necessary actions. Prior to the proposal, Resupply Treasury, Convex Treasury, and C2tP had already paid out 2,868,832 reUSD, leaving a non-performant debt of 7,131,168 reUSD.

The proposal suggests a multi-faceted approach to manage the non-performant debt. Firstly, 6,000,000 reUSD of the non-performant debt will be burned through the Insurance Pool. This amount represents approximately 15.5% of the current 38.7 million reUSD in the Insurance Pool. Secondly, the protocol will bear the ongoing non-performant debt to reduce the owed amount in the Insurance Pool, effectively decreasing the total non-performant debt from the original Insurance Pool amount by 4 million reUSD. Lastly, the remaining non-performant debt, amounting to 1,131,168 reUSD, will be gradually repaid by the DAO through future revenue sources. These sources may include protocol fees and/or a potential RSUP OTC sales plan, which will be decided by the Treasury or Governance at a later date.

This recovery plan is a critical step for Resupply as it navigates through the aftermath of the hack. The bad debt of 6 million reUSD poses a significant financial challenge that could impact the company's liquidity and operational capabilities. By utilizing the insurance pool, Resupply aims to mitigate this risk and maintain its financial stability. This proactive approach to risk management and financial prudence is a strategic initiative that underscores Resupply's commitment to long-term sustainability.

The decision to use the insurance pool to cover the bad debt is a testament to Resupply's resilience and adaptability. It demonstrates the company's ability to address immediate financial challenges while setting a precedent for future risk mitigation strategies. This initiative is expected to bolster investor confidence and reinforce Resupply's position as a reliable and stable financial entity. By taking these proactive measures, Resupply aims to ensure the continuity of its operations and maintain its financial health in the face of adversity.