After a four-month hiatus, the Ethereum-based algorithmic stablecoin Beanstalk has relaunched its protocol. The protocol had been paused since April 17, when it suffered a massive governance breach and flash loan exploits that led to the loss of more than $180 million in various crypto assets.
The self-styled “credit-based” stablecoin announced the resumption of its services on the first anniversary of its debut on the Ethereum mainnet. The announcement was made in a blog post shared by the protocol’s creators, Publius, on August 6, 2022.
“Today, Beanstalk Farms is thrilled to announce that Beanstalk has been Unpaused on the one-year anniversary of its initial deployment,” the post stated.
Publius further avered that “Beanstalk has come out on the other end of this ordeal stronger than ever. It is a testament to the creditworthiness of the protocol and its potential to help realize a permissionless future.”
Beanstalk Cut Down After Governance Hack
Beanstalk Farms describes its BEAN token as a decentralized stablecoin that maintains near parity with the US dollar using credit instead of collateral.
Eight months after its initial launch, the protocol’s market cap had organically grown to more than $100 million, and it had attracted about $144 million in long-term liquidity.
However, the protocol made headlines in mid-April this year after a hacker used its governance mechanism to steal from it.
On April 17, an attacker exploited a vulnerability on DeFi lender Aave’s flash loan service to borrow nearly a billion dollars worth of digital currency, which he then exchanged for enough BEAN tokens to gain about 67% voting stake in the Beanstalk platform. With this supermajority, the attacker voted and approved the transfer of Ethereum (ETH), BEAN, and assorted cryptocurrencies, valued at $182 million, into his wallet.
According to blockchain security auditing firm PeckShield, after repaying the Aave loan, the attacker made about $80 million in profit from what was essentially 13 seconds of work.
Publius Hopes “Replant” Will Help Security Take Root
While it is impossible to predict how the revamped Beanstalk protocol will perform, Publius hopes the relaunch will help alleviate concerns about the stablecoin protocol’s security and trust following the April 17 exploit.
During the relaunch event, dubbed “The Replant,” Publius stated that it had moved Beanstalks’ governance mechanism to a community-run multi-signature (multi-sig) wallet until a more secure on-chain mechanism can be implemented.
The new multi-sig security will require at least five of Beanstalk’s nine validators to validate all governance decisions.
Beanstalk has a long way to go before it can match its previous successes before the hack. The BEAN token surpassed a market valuation of $100 million in mid-April. At the time of writing, the figure was $286,565, with the token trading at $0.00399, well below its $1 peg.
In addition, the project has had limited success in recouping the funds stolen in the April exploit. The project had raised about $10 million through a fundraising campaign called “The Barn Raise,” aimed at replacing the stolen funds.