The team behind a credit-based stablecoin protocol Beanstalk Farms is planning to raise $77 million in an over-the-counter loan from private investors.
With this, Beanstalk seeks to revive the project following a major hack that led to a $182 million loss or more likely to say lost all of its total value locked.
On May 7, the Beanstalk DAO that oversees the project approved a governance vote that enables the core team to borrow funds. These funds will then be used to replenish the hack drained project.
This will also lead to the issuance of a new stablecoin token. Additionally, the project plans to pay back investors affected by the April 17 hack through the issuance of yet another token.
The team intends to issue a new token to OTC lenders, saying that it will provide a 500% yield until the loan is fully repaid, according to the proposal. Beanstalk has not yet disclosed who might lend the money.
Publius, the project’s founder, in a Monday ask-me-anything announcement said that the debt capital will go to whoever was affected by last month’s flash loan attack. After burning and freezing all of their hacked stablecoins, the Beanstalk team has calculated that it needs $77 million to reimburse losses incurred by investors.
The potential fundraising seems the last attempt to restore the project as it already has proposed to offer a 10% bounty to the hackers who stole $182 million.
Unlike algorithmic stablecoins or those that rely on collateral, Beanstalk used loans to back its value and investors would invest in Beanstalk debt assets known as “pods”.
The pods behave like time-vested bonds paying high annual interest in a Beanstalk’s native stablecoin Bean.
