Beanstalk's algo stablecoin protocol relaunches after being hacked

Beanstalk Farms, an Ethereum-based algorithmic stablecoin project,

 has relaunched its protocol just under four months after going offline following a devastating $77 million governance exploit.

The protocol and its governance had been halted since April following the governance exploit and flash loan attack, but were reactivated on August 6 in an event called the "Replant."

Beanstalk stated in an announcement shared with sources that “it had emerged stronger than ever, most likely in regard to protocol governance and security.”

“Beanstalk has emerged from this struggle stronger than ever before. It demonstrates the system's credibility and ability to help create a permissionless future,” according to Publius, the developer organization behind the BEAN stablecoin and protocol.

Publius claimed that protocol governance has now been relocated to a community-run multisig wallet until a safe on-chain governance mechanism can be created.

The team also announced that it had completed two protocol audits from leading not-for-profit smart contract auditing firms, ‘Trail of Bits’ and ‘Halborn’.

The spokesperson also stated that additional network application development is already underway, with the Root Protocol launching a $9 million seed round on July 26 to establish financial, commerce, and sports betting marketplaces on Beanstalk.

The project has a long way to go before it can match the prior metrics it had before the breach. Beanstalk's algo-stablecoin BEAN surpassed a market valuation of $100 million in mid-April, but at the time of writing, the figure stands at just $284k, with the asset trading at $0.0039, well below the $1 mark, according to CoinGabbar statistics.

In addition, the project has had minimal success in recouping the funds stolen in the April exploit. As of June 5, the project has gathered $10 million through a fundraising campaign to restore the stolen funds.

Long-term sustainability

However, since algorithmically backed stablecoins are also up for debate, it is unclear how long-term BEAN will be viable. Publius even mentioned back in June, as he noted:

“At present, it is unclear whether Beanstalk is capable of sustaining itself in eternity. There are still some inefficiencies in the model. However, Beanstalk is probably strong enough to survive in the short run.”

Many projects have devised various methods to avoid the collateral needs and centralization issues that come with creating a scaled stablecoin.

Beanstalk's variation operates and hovers around its desired $1 peg by relying on a decentralized credit facility, decentralized pricing oracle, and governance community.

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