1inch DAO to Vote on $768K Compensation for Hack Victims

The 1inch Foundation tabled a proposal to distribute $768,026 from the DAO treasury to users who lost funds during an October 2024 security breach. The Snapshot vote on Proposal 1IP-80 opened on June 19, 2025 and closes on June 22, requiring a simple majority to pass.

This initiative represents one of the largest community-driven compensation efforts in DeFi history. Rather than pursuing traditional legal channels, 1inch decided to use its DAO governance framework to resolve the matter through token holder consensus.

Under the proposal, affected users must complete KYC checks, file law enforcement reports, and agree to waive claims on any future recoveries. As of publication, 53.47% of votes are in favor versus 46.53% against, with two wallets casting the majority on each side.

The October Attack Details

The exploit happened back on October 30, 2024. Attackers exploited a vulnerability in the Lottie Player library, an animation plugin used by 1inch's web interface, to siphon $768,026 in USDC from the protocol’s liquidity pools. Unlike classic flash‑loan attacks, this breach leveraged compromised front‑end code to trigger unauthorized transfers when users interacted with the dApp interface.

The exploited function processed animation assets before executing transaction logic, allowing malicious code to intercept user transactions and redirect funds. Once detected, 1inch paused contract functions and coordinated with security partners to identify the scope of the compromise and protect remaining assets.

DAO Vote Mechanics and Community Response

In response to the breach, the DAO proposed a $768,026 reimbursement plan that would transfer USDC from the DAO treasury to the 1inch Foundation. The voting will remain open until June 22. It requires a simple majority, with no minimum quorum. At the time of publication, 30 wallets have voted (53.47% in favor and 46.53% against), representing 7.1 million in voting power.

While supporters of the proposal argue reimbursement maintains user confidence in the protocol, opposition voices concern about depleting treasury funds and creating expensive precedents for future incidents. One major opponent stated that the DAO lacks consistent revenue streams to operate as an insurance fund, suggesting that dedicated insurance protocols should handle such losses instead.

Users seeking compensation must complete KYC verification, file law enforcement reports, and waive claims on any future fund recovery. 

Precedent for DeFi Compensation — What’s Next?

The October 2024 exploit marks 1inch’s first on-chain restitution plan. Unlike the more recent $5 million breach in March 2025, where negotiations with the attacker helped return most funds, the Foundation seeks direct DAO-funded reimbursement.

The 1inch vote represents a test case for how DeFi protocols balance user protection with long-term financial stability. Moreover, the outcome may influence how other protocols handle future security incidents.

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