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Alex Protocol, a Bitcoin-focused decentralized finance (DeFi) platform, has introduced a Treasury Grant Program to reimburse users impacted by a recent exploit. The attack, which occurred on June 6, resulted in losses exceeding $8 million.

Compensation Program Details

The Treasury Grant Program will provide financial support to affected users in the form of original tokens and USDC equivalents, depending on the type of asset lost. Users must connect their impacted wallets to the official grant interface, review their specific compensation offers, and sign a confirmation message to accept the terms and conditions.

Overview of the Exploit

The exploit targeted multiple liquidity pools on Alex Protocol and was attributed to a vulnerability in the platform’s self-listing verification logic. This flaw allowed the attacker to drain approximately 8.4 million STX, 21.85 sBTC, 149,850 aUSD, and 2.8 aBTC, resulting in total losses of over $8.3 million.

Community Insights

While Alex Lab has not yet released a technical post-mortem report, some community members have speculated that the issue may be connected to a limitation within the Stacks blockchain. One community member noted:

“I was wrong with my initial assessment of this hack – I didn’t understand fully how ALEX contract was meant to work. But now I can confirm it was a Stacks limitation that theoretically can be mitigated, but in practice, I don’t think it is feasible.”

Reimbursement Structure

The reimbursement plan is based on average on-chain prices observed during the incident from 10:00 am to 2:00 pm UTC on June 6. Notifications and claim instructions were sent to affected wallet addresses by June 8. Below is a breakdown of the compensation structure:

  • STX Losses: Full reimbursement in USDC at a fixed exchange rate of 0.68 USDC per STX.
  • sBTC Losses: 100% compensation in aBTC.
  • aBTC Losses: 75% reimbursed in aBTC and 25% in USDC, calculated at a rate of 102,734 USDC per aBTC.
  • aUSD Losses: 91% reimbursement in aUSD and 9% in USDC at parity.

Support payments will be distributed to eligible Ethereum addresses by June 17. Affected users must accept the grants by a deadline that will be communicated through official channels.

History of Security Breaches

This incident marks the second major exploit involving Alex Protocol. Last year, the platform experienced a $4.3 million breach linked to its cross-chain bridge infrastructure. At the time, developers suspected the involvement of the North Korean hacker group Lazarus.

Following the previous incident, ALEX Lab initially offered a 10% bounty for the return of 90% of the stolen assets. However, the offer was later withdrawn without any public explanation.

The platform continues to work on strengthening its security measures to prevent similar vulnerabilities in the future, aiming to rebuild trust within its user base.

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