Inverse Finance Addresses Bad Debt with $2.6M Raise

Inverse Finance, a decentralized finance (DeFi) lending protocol, has successfully secured $2.6 million to cover a portion of its outstanding bad debt. This move signifies a commitment to financial stability and user trust after previous security breaches.

The Debt Origins

The bad debt stems from malicious exploits on Inverse Finance's deprecated lending markets in April and June of 2022, resulting in losses exceeding $24 million. Further contributing was the Euler Finance flash loan attack in March 2023.

Funding the Recovery

The $2.6 million was raised by selling 104,000 Inverse tokens to DeFi investors at $25 per token, paid in Dola, Inverse Finance's stablecoin. This indicates investor confidence in the long-term potential of the Inverse token and the protocol's governance structure.

A Commitment to Users

According to Inverse Finance founder Nour Haridy, repaying the debt is a moral obligation to users who entrusted the protocol with their funds. The repayment is viewed as an investment in the future of the DAO and its users.

Next Steps

With the $2.6 million secured, Inverse Finance still faces $3.4 million in bad debt. The DAO plans to cover this remaining balance through a borrowing arrangement with 40acres.finance, another lending protocol.

Key Takeaways

• Inverse Finance raised $2.6 million by selling Inverse tokens to address bad debt from past exploits.
• The move reflects a commitment to user trust and the long-term viability of the protocol.
• The remaining bad debt is planned to be covered by borrowing from another DeFi lending platform.
• This news comes as the protocol has reached $100 million in loans on its fixed-rate lending market platform FiRM.