Key Takeaway:
- WazirX introduces “socialized loss strategy” to address $235 million hack.
- Users can choose between Option A and Option B for fund recovery.
- Community response to the strategy has been mixed, with concerns about the locked assets.
WazirX Implements Socialized Loss Strategy
Following a recent hack resulting in a loss of $235 million, Indian crypto exchange WazirX has revealed a “socialized loss strategy” to manage the impact. The strategy involves allowing users to access 55% of their assets immediately, while the remaining 45% will be locked in USDT-equivalent tokens.
User Recovery Options Offered by WazirX
WazirX has presented two options for users affected by the hack to recover their funds. Option A allows users to access 55% of their funds for trading and deposits, with priority in potential recovery proceeds. Option B permits users to withdraw 55% of their assets in a staggered manner, albeit with lower priority in the recovery queue. The remaining 45% of user assets will remain locked on the exchange as USDT-equivalent tokens.
Community Response and Concerns
While WazirX’s socialized loss strategy aims for a fair distribution of losses, there has been criticism from some users regarding the locked assets converted to stablecoin. Co-founder Nischal Shetty has defended the decision, citing the need for stability in planning recovery strategies amidst cryptocurrency price volatility.
