Hacked Crypto Exchange Cypher Plans to Hold Public Token Sale
Solana-based decentralized exchange Cypher plans to soon hold a token sale as part of its efforts to recover from its debilitating hack earlier this month.
In a series of blog posts, contributors said Cypher will use the proceeds of the sale to fund development and fill the project’s depleted treasury. Cypher lost upwards of $1 million in various assets on August 7 when a hacker drained much of the protocol just as it was catching fire.
The expedited IDO plan (it was originally slated for end of September) will see Cypher attempt to plug the hole by issuing a debt token to investors who lost their deposits to the hack. They’ll be able to get their money back from the protocol as it grows, the blog post said.
Cypher’s new token issuance plan will test whether the protocol can recapture the heady momentum of late July and early August, when airdrop hunters piled into one of the fastest growing protocols in the Solana ecosystem.
It could also showcase where the Solana ecosystem and its investors stand on new token issuances. The blockchain hasn’t seen a major initial decentralized offering (IDO) in a long time.
The sale’s tokenomics are uncommonly tilted toward public investors. According to Cypher’s posts on X, formerly known as Twitter, over 45% of tokens will be sold to the public, with 23% earmarked for the team, 11% for investors, 1.2% for advisors and 12% for growth incentive programs.
Another 7.3% will go toward airdrops of the token. It’s not clear how Cypher wil manage its airdrop, which many of its newer customers expected to be based on their activity, as measured by a points system that preceded the Aug 7 hack. Regardless, it will airdrop 50 million tokens to depositors who lost money to the hack.
The protocol will refund impacted depositors at a rate of 31 cents on the dollar, using the funds that had not been stolen.
Cypher is still trying to get the hacked funds back from the Aug. 7 attacker, the blog post said. It has managed to freeze $600,000 worth of crypto in centralized exchanges. “The return of these funds will be predicated on the cooperation of these CEXs and seizure warrants being issued by law enforcement,” the blog post said.