Responding to a protocol exploit
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 8 min
In short
When a protocol you use is exploited, the first moves are: revoke approvals, move whatever assets remain to safety, and verify the facts through official channels. Order and speed decide the outcome. There is no guarantee that losses will be compensated, and anyone offering to recover your funds is frequently the second stage of the attack.
Key points
- Revoking approvals comes first — a zero balance does not stop a live approval
- Consider moving other assets in the same wallet to a different address
- Confirm facts through official announcements, not fragments on social media
- Anyone offering to recover your funds is very likely running a second scam
Definition
The steps a user takes to stop further loss when a DeFi protocol they use suffers an exploit or failure that drains assets.
The first action is revoking approvals. Most losses run through permissions granted to a contract, and a live approval keeps working even after your balance hits zero — funds you deposit later can leave by the same route. Use an approval-listing tool and cancel everything related to that protocol. Revocation is an on-chain transaction, so make sure you have native currency for gas.
Second, move what is left. If other tokens or NFTs sit in the same wallet, you cannot assume the damage was confined to one approval. Where a key compromise cannot be ruled out, consider moving assets to a different address — a hardware wallet if you have one. When in doubt, work from the largest holdings down. Transfers also cost gas, so do not send the entire native balance away.
Third, establish the facts. Read the protocol's official announcement and documentation, and check your own address's history in a block explorer. Do not act on fragments circulating on social media at this stage. Immediately after an incident, accounts impersonating the team and sites announcing an 'emergency migration' reliably appear to harvest whatever you have left. Follow links from the official site and open nothing else.
On compensation: do not plan around it. Some protocols announce partial reimbursement from their own reserves, but this is discretionary, and the operators define both the scope and the conditions. Nothing happening at all is a common outcome. Rather than waiting on an assumption that funds will return, stop the bleeding and build a record — transaction hashes, timestamps, amounts and the addresses involved.
Finally, guard against the second wave. Any address or account that publicises a loss will be contacted by people offering to recover the funds, sometimes styling themselves as white-hat recovery. These are almost always scams demanding an up-front fee, or a fresh approval, or a private key. Genuine recovery efforts essentially never reach victims through unsolicited direct messages. If you need help, go through the protocol's official channel and, where appropriate, domestic consumer advice bodies or the police.
Watch out for
- · A zero balance does not neutralise a live approval — assets you deposit afterwards will leave the same way. Revocation comes first
- · Anyone who contacts you individually offering to recover funds or handle a compensation claim is almost certainly the second scam. They will want an up-front fee, a new approval, or a private key
- · Compensation is not guaranteed. It is at the operators' discretion, you may fall outside its scope, and nothing may happen at all
Frequently asked questions
Where can I turn if I have been hit?
Report it to the protocol's official channel with the records you gathered. In Japan, consumer affairs centres and the police cybercrime consultation desks exist as well. Be realistic, though: where the counterparty is an anonymous overseas protocol, recovery is extremely difficult, and private services promising it include a great many scams.
I need to revoke immediately but have no gas. What now?
Revoking requires broadcasting a transaction, so you must top the wallet up with native currency. But if the key itself may be compromised, whatever you send can be taken too. Prioritise according to the situation — cancel the largest-exposure approvals first, or decide to evacuate the remaining assets before anything else.