On May 27, the Resolv Foundation unveiled its first comprehensive recovery strategy, marking a two-month interval since the initial security breach. The incident originated on March 22 when attackers exploited a vulnerability within the AWS KMS environment to forge Resolv tokens. By deploying approximately $200,000 in USDC, the perpetrators minted 80 million unsecured USR tokens, which were subsequently liquidated for roughly $25 million in ETH before being transferred off-chain. This massive outflow caused the USR price to collapse below $0.03, forcing the protocol into a suspended state. Data compiled by Woofun AI indicates that following the announcement of the recovery framework, the USR price staged a rapid rebound, climbing from $0.14 to approximately $0.45. The foundation's response categorized affected users into six distinct groups, establishing a strict claim deadline of August 26, after which no further submissions would be processed.

The core innovation of this recovery plan lies in its application of traditional finance debt structures to a decentralized finance context. Rather than relying on post-event governance votes or ad-hoc foundation bailouts, Resolv invoked clause 4.3 of its service terms to enforce a pre-defined hierarchy. Under this framework, USR was designated as the senior tranche, while RLP was assigned the role of the junior tranche, legally obligated to absorb losses before USR holders. This approach mirrors the mechanics of Collateralized Debt Obligations (CDOs), asset securitization, and Chapter 11 reorganization processes found in U.S. bankruptcy law. Woofun AI notes that this rigid adherence to product terms represents a significant departure from typical DeFi resolution methods, which often involve community negotiations to allocate losses.

The compensation logic for the first category, comprising direct holders of USR and wstUSR, was bifurcated based on a snapshot taken at the time of the incident. Holders possessing tokens prior to the attack were classified as senior creditors and received full 1:1 compensation in USDC. Conversely, those who acquired USR after the incident were compensated at a 1:0.5 ratio, reflecting their exposure to the illicitly minted supply regardless of their purchase price. For post-incident buyers, any acquisition price below $0.5 USDC indicated a discounted entry, yet the compensation ratio remained fixed at 50%. The second category addressed liquidity provider (LP) positions involving USR, requiring a more granular breakdown of each position into a USR component and a matching asset component.

For LP positions held before the incident, the protocol applied a 1:1 compensation ratio.

However, positions that required rebalancing due to the hacker's sales activity were compensated at the reduced 1:0.5 ratio. Ordinary LP providers were slated to receive approximately 75% of their value in cash compensation supplemented by RESOLV tokens, with officials projecting an overall recovery rate of around 95% of their initial positions. In contrast, leveraged LP positions faced significantly lower recovery rates after debt deductions. The third category, consisting of RLP holders, encountered the most contentious terms of the plan. As the designated junior tranche, each RLP token was valued at $0.71 USDC, with the reference price reset to 55% of its pre-incident level.

To mitigate the cash shortfall, RLP holders received an additional 2.71 RESOLV tokens for every RLP token held, theoretically pushing the overall compensation rate above 60%.

However, the plan explicitly stipulated that any RLP position liquidated due to leverage would receive zero compensation, a provision that would result in total losses for large leveraged holders such as those associated with Stream Finance. The fourth category covered lending market participants; users who provided USR as collateral on platforms like Morpho or Fluid were treated as pre-incident holders and compensated at a 1:1 ratio. Users providing USDC or USDT were not directly compensated by Resolv, as their loss recovery depended on the respective protocols or wallet managers involved.

The fifth category included users of the USR Yield Maxi wallet, who were compensated at 90% of the pre-incident price of their holdings. The sixth category addressed PT and YT positions on Pendle, which were converted into wstUSR and compensated at a 1:1 ratio using the system token SY. In the latter half of the announcement, Resolv introduced a new business vertical named Vault Street, managed by the Resolv Foundation. Positioned as an institutional distribution platform for tokenized real-world assets, its inaugural product, primeUSD, entered private beta testing and launched officially in June. Woofun AI analysis suggests this new line targets institutional wallets and large funds, offering licensed leveraged exposure to tokenized U.S. Treasury bonds, thereby leveraging the team's deep TradFi background in structured products and securitization.

To bridge the gap in cash compensation, Resolv committed to distributing 10% of its total token supply, with 70% of this allocation directed toward affected RLP holders. the price of RESOLV tokens had declined by more than 22% over the preceding 30 days, trading at approximately $0.023 USDC at the time of publication. This market price sat well below the reference price outlined in the announcement.

Furthermore, with over 10,000 RESOLV tokens scheduled for linear unlocking over a 24-month period, the effective value of compensation for RLP holders was significantly diminished. By utilizing tokens to cover cash deficits, the foundation effectively transferred the financial burden and market risk of the recovery process onto the victims, exposing them to potential further price depreciation over the next two years.