Bonzo Recovery Update: Claims Mechanism and Opening Timeline

Important notes

The figures in this post are estimates based on market prices for surplus tokens, including WETH, and the HBARX-to-HBAR redemption rate captured on 30 October 2026 at 08:14:54 UTC. Final allocations will reflect the USDC and HBAR actually received from sales, redemption and funding transfers. We’ll confirm the opening date once the funds are in place and the final checks are complete.

Preparing to open claims

Bonzo Finance Foundation (the “Foundation”) is preparing a two-week recovery rollout: contract upgrades, asset transfers and conversions from Monday, 2 November, followed by a target claims launch during the week of 9 November, once funding and final checks are complete.

The smart contracts used for this recovery workflow have been developed, audited, and deployed to mainnet; they are undergoing final testing prior to launch of the recovery portal.

The preparation completed includes:

• Smart Contracts: the aToken implementation and redemption contract have been deployed by the team. They have been audited by Halborn earlier.
• Claims portal: the user interface is complete; beta testing is underway.
• Recovery funds: The Hedera Foundation has approved 795,431 USDC towards recovery.

We thank the community for their patience while the Foundation worked through the recovery preparation process. Based on input from various parties involved in the recovery process, a final calculation methodology has been decided upon. Below, we explain the updated calculation, what users can expect leading up to and during the recovery portal launch, and the steps remaining before claims open. This update replaces the mechanics described in earlier Foundation updates, including the shared-percentage approach and the proposed repayment window.

How the claim allocations were calculated

Each account’s pre-exploit net entitlement is calculated by subtracting borrowing from the value of supplied assets at pre-exploit prices. Debt repayments and withdrawals made after the position snapshot are also accounted for: users get credit for debt they repaid and are not allocated funds they already withdrew. The same calculation rules are applied across all eligible accounts.

• Position snapshot: Hedera mainnet block 97,504,677, timestamped 11 July 2026 at 00:51:36 UTC, records the pre-exploit supplied balances and borrowing.
• Pre-exploit prices: CoinGecko USD price observations for 11 July 2026 at 00:00:00 UTC. KARATE uses the saved daily price observation for that date; USDC is valued at US$1 in the pre-exploit calculation.
• Recovery inventory: Underlying assets were captured at Hedera mainnet block 101,581,825, timestamped 26 October 2026 at 09:57:20 UTC; inventory balances are separate from the pre-exploit position and price snapshots.

The largest institutional account and the Bonzo Lend protocol revenue account will not claim their share and are excluded from the recovery calculations.

The recovery starts with the tokens already held by the protocol. First, we calculate how much users can receive in the same tokens they supplied (in-kind), after accounting for borrowing. Token surplus left over, after those allocations, will be sold or redeemed. The token surplus and the Hedera Foundation contribution will then help cover remaining shortfalls.

1. Allocate the available tokens back in kind

• To start, every account’s originally supplied tokens are accounted for and adjusted for borrowing (netting) using pre-exploit prices. The tokens available in the protocol are then allocated to those claims. “In kind” means accounts receive the same type of token they supplied.
• If there is not enough of a particular token to cover these claims, everyone eligible for that token receives the same proportion of their calculated amount. Tokens set aside for in-kind claims will not be sold to cover the deficits of other assets.

2. Sell or redeem the surplus

• Once the in-kind allocations are set aside, any tokens left over are the surplus. Only this surplus will be used for the sales and redemption below.
• Surplus tokens, except for HBARX, are sold for USDC. Surplus HBARX will be unstaked and redeemed for native HBAR through the HBARX staking portal, rather than sold on the open market.
• The USDC and HBAR from this exercise will be added to the recovery funds available for eligible accounts that still have a shortfall.

3. Add the surplus proceeds and Hedera Foundation funding

• The HBAR from the surplus HBARX redemption is allocated to all eligible accounts that still have a shortfall against their pre-exploit net entitlement, in proportion to that shortfall.
• The USDC from token surplus sales are then applied to the remaining shortfalls; once received, the approved 795,431 USDC from the Hedera Foundation will also be allocated towards those shortfalls.
  • Edit (November 6, 2026): The 795,431 USDC from the Hedera Foundation has been received.
• Each allocation reduces the remaining shortfall against the account’s pre-exploit net entitlement. Total allocations are capped at that entitlement.

Preparing the final claim file

Once the sales, HBARX redemption, and funding transfers are complete and reconciled:

1. Prepare and verify the final claim CSV recording each eligible account’s token amounts.
2. Generate the Merkle root from that CSV and configure it in the redemption contract.
3. Open the portal so users can claim their allocations from the contract.

The CSV records the claim data; the contract uses its Merkle root to verify claims.

Why there’s no separate repayment window

• In simulations of the previously considered socialised-losses option, repayment would have cost most tested borrowers more than the additional recovery it generated.
• Borrowing is already accounted for: Pre-exploit prices are used to net borrowing against supplied assets. Repaying debt now would incur a cost at current prices, while any increase in entitlement would be calculated at pre-exploit prices. The additional payout would not necessarily cover the repayment cost.
• Earlier access to recovery funds: A repayment window would add another waiting period, reconciliation, and recalculation before claims can be opened to users; returning available funds to users as soon as the required checks are complete is of the highest priority.

What the current estimates show (subject to change)

• Eligible accounts: 2,535
• Aggregate recovery at pre-exploit prices: ~81% (est.), including the approved contribution
• Individual estimated recovery: ~56% to 100% (est.), depending on supplied assets and borrowing
• Accounts whose pre-exploit net entitlement is fully covered: ~1,875 (est.)
• Accounts with a remaining shortfall: ~660 (est.)

The ~81% figure is the combined recovery across all eligible accounts; it does not mean every account receives 81%. The range and account counts treat any remaining amount below US$0.000001 as a rounding remainder and the entitlement as fully covered. All these figures use pre-exploit prices for both entitlements and allocated tokens. They do not promise the return of every originally supplied token or restoration of its value at today’s prices. Some users would still face meaningful losses.

Shortfall remaining

The Foundation is grateful for the Hedera Foundation’s approved contribution of 795,431 USDC, which will substantially reduce the losses borne by users.

• Our understanding is that the contribution was calculated with reference to the funds taken by Wallet A, after accounting for the institutional allocator’s waived position.
• For the recovery distribution, we also include accounts affected by liquidations during the exploit window, so those users can participate alongside other affected users.
• The available recovery funds also reflect the 10% bounty retained by Wallet B. Together, the recovered assets, surplus proceeds and approved contribution reduce the shortfall, but do not cover all eligible users’ pre-exploit net entitlements.

We remain in discussions with external parties about the remaining shortfall. Those discussions may or may not produce additional recoveries or funding. No further amounts are included in the estimates above.

Edit (November 6, 2026): The 795,431 of USDC received is the final commitment made by the recovery funds provider.

Timeline

Week of 2 November: upgrades, transfers and conversions

We plan to begin on Monday, 2 November, subject to final operational checks:

• Upgrade the aToken contracts and sweep available underlying assets into the redemption contract.
• Withdraw only the surplus needed for sales and redemption, protecting the assets reserved for in-kind claims.
• Sell the non-HBARX surplus for USDC and initiate the surplus HBARX redemption.

Week of 9 November: final funding and claims

• Add the approved Hedera Foundation contribution, USDC sale proceeds and native HBAR received from redemption to the contract.
• Reconcile the assets, verify the final claim CSV, configure its Merkle root and complete the final claims checks.
• Publish the official portal link, allocations, claim terms and instructions.

Sales, redemption completion and funding transfers may affect these dates. We will confirm the launch once the required steps are complete.

Possible second round of claims

If funds remain unclaimed 90 days after the claims portal opens, we may hold a second round of claims. Only users who meet both of the following conditions would be eligible:

• Completed their first-round claim via the official Bonzo Finance claims portal within the first 90 days; and
• Still have a shortfall against their pre-exploit net entitlement after the first round.

Any funds available for the second round would be allocated proportionally to those eligible users’ remaining shortfalls, capped at each user’s remaining pre-exploit net entitlement. Users who did not complete a first-round claim through the official portal would not be eligible. We will confirm whether a second round will take place and publish its terms before it opens.

What can users expect next?

• No action is needed yet. We will announce the confirmed opening date and claim instructions through the Foundation’s official channels.
• To claim, users will need to accept the Bonzo Lend Recovery Program Terms once they are made available, which will include a release of claims relating to the exploit and the recovery. Please carefully read those Program Terms before claiming.
• Final allocations will use the assets actually received. Sale prices, slippage, fees and redemption rates may change the recovery figures and address counts.
• The market value of claimable tokens will continue to change; the calculation values them at pre-exploit prices.
• We will communicate material changes and make the final claim information and terms available before claims open.

Disclaimers

• Purpose and status. This update is provided for general information only. It does not constitute legal, tax or investment advice, an offer to enter into a settlement, or a binding commitment to make any payment. Users should obtain independent advice where appropriate.
• Basis of estimates. All allocations, recovery percentages, shortfalls and address counts are indicative and subject to verification and revision. This draft uses surplus-token market prices, including WETH, and an HBARX-to-HBAR redemption rate captured on 30 October 2026 at 08:14:54 UTC. Entitlements are calculated separately using pre-exploit positions and prices. Recovery percentages value entitlements and payouts at pre-exploit prices and do not measure recovery at current market prices.
• Execution and valuation risks. Final claim amounts will depend on the assets and net proceeds actually available following sales, redemptions and reconciliation. Market movements, liquidity, slippage, fees and operational factors may change the results. The current estimates assume no sale slippage or execution fees. No particular token quantity, market value, recovery percentage or full recovery is guaranteed.
• Funding assumptions. The estimates include the approved 795,431 USDC Hedera Foundation contribution, subject to its receipt and availability for distribution. Funding approval does not establish that a transfer has been completed. Discussions concerning further recoveries or contributions may not result in additional funds, and no such amounts are included in these estimates.
• Timing and technical risks. All dates are targets and remain subject to completion of contract upgrades, asset transfers, sales, redemptions, funding and final checks. Deployment, audit completion and completion of the user interface do not guarantee uninterrupted operation, security or availability on a particular date. Timelines and implementation details may change.
• Final claim terms and legal rights. Eligibility, final allocations and the conditions for claiming will be set out in the final claim documentation made available before users claim. This update does not itself settle, release or waive any claim or legal right, or amend any existing agreement. Nothing in this update excludes or limits any right or liability that cannot lawfully be excluded or limited.