Prisma Finance's $540K on the Line as Hacker Presses for Team Reveal

Prisma Finance, a decentralised finance (DeFi) firm, reveals that $540,000 remains at risk from accounts that have yet to revoke the smart contract linked to last week's $11.6 million exploit.

In a twist, the purported "white hat" hacker behind the breach insists on withholding the returned funds until Prisma publicly apologizes and reveals the identities of its team members online.

Core contributor "Frank" outlined a "path forward" on 1 April, prioritising the protocol's reactivation while urging users to secure their wallets and positions.

Last week, the protocol faced a significant multimillion-dollar exploit, pinpointed to two MigrateTroveZap contracts.

These contracts were initially intended to facilitate the seamless migration of user positions between trove managers, as detailed in Prisma's post-mortem update, most recently revised on 31 March.

Despite efforts, 14 accounts, five of which pose substantial risks with open trove positions exceeding $500,000, are yet to retract the compromised smart contract.

“Of the affected Troves several have revoked the contract containing the vulnerability with ~$540k of collateral still at risk at the time of writing.”

Prisma operates as a decentralised borrowing protocol, leveraging "troves" - Ethereum addresses - as platforms for users to initiate and manage loans.

Among these, the largest address deemed "at risk" holds $484,380, with the remaining four ranging between $7,120 and $22,080.

Frank detailed that a key aspect of their "path forward" strategy involved "preserving extra reserves" while Prisma embarked on recovering the embezzled funds.

Subsequently, a proposition emerged on 1 April, aiming to diminish liquidity from POL and staked revenue from vePRISMA.

Moreover, Prisma emphasised that the compromised contract remained distinct from the core protocol and affirmed intentions to reinitiate it once the residual user funds were secure.

Exploiter Demands Team Reveal Themselves

However, tensions escalate as the "white hat" demands a public apology and a team reveal, alleging Prisma's lack of good faith.

The exploiter wrote in a 30 March on-chain message:

“During that session, you must specifically present the mistake you made, which party audited the smart contract, and your plan to improve security in the future.”

Prisma refutes the claims, highlighting the absence of returned funds as evidence of mutual trust deficits:

"There is little evidence that we can judge you on that you are sincere in your intention to return the assets. Most genuine white hats would have returned at least some of the funds by now.”