The Resupply Exploit: Strengthening Threat Detection And Response with FailSafe Monitor

Published: June 26, 2025

What Happened to Resupply?

On June 26, 2025, Resupply, a decentralized stablecoin protocol utilizing Curve and Frax liquidity was flagged for suspicious on-chain activity involving its reUSD vaults.

While the exploit may have been unavoidable at the moment it occurred, the real opportunity lies in what could have been done differently – specifically, in how a proactive incident response system could have mitigated downstream impact.

Understanding the Risk Landscape

Resupply operates by allowing users to mint reUSD through collateral supplied via Curve Lend or Fraxlend. Though it includes a native insurance pool to handle protocol risks, the absence of real-time alerts and automated action mechanisms left the system vulnerable to unchecked escalation.

How FailSafe Monitor Could Have Improved Incident Response

FailSafe doesn’t claim to eradicate all hacks but it is built to drastically reduce response time and ensure that the right actions happen when seconds matter most.

1. Early Threat Detection with Real-Time Alerts

FailSafe Monitor could have flagged the anomalous behavior in Resupply’s reUSD vaults in real time by:

• Detecting deviations from normal transaction flows.
• Monitoring for suspicious borrowing/minting patterns.
• Correlating activity across Curve Lend and Fraxlend to identify systemic exposure.

The system would then instantly notify the Resupply team through integrated channels like Slack, Telegram, or email.

Outcome: Resupply could have been alerted minutes or even hours earlier than community detection.

2. Trigger-Based On-chain Pause and Protection

FailSafe supports pre-configured response triggers tied to behavioral anomalies. In this scenario:

• A surge in reUSD vault anomalies could have automatically triggered a Pause Function across critical smart contracts.
• Funds at risk could have been routed to a safe vault pending investigation.
• Further user interaction with compromised contracts could be frozen, stopping additional damage.

Outcome: A rapid containment response before the attack fully matured.

3. Structured War Room Activation and Escalation

Once the alert was sent, FailSafe’s monitoring suite could have activated a war room coordination system:

• Escalation paths based on severity (technical, legal, comms).
• Dedicated response channels for engineers and stakeholders.
• Instant replay logs for incident reconstruction and root cause analysis.

Outcome: Instead of community speculation, Resupply could have led with clarity, issuing coordinated updates and internal action plans.

4. Post-Incident Insights and Future Hardening

While real-time intervention is critical, so is postmortem insight. FailSafe provides:

• Replayable attack traces for audit and recovery.
• Suggested hardening rulesets based on the exploit pattern.
• Historical baselining to tighten alert sensitivity going forward.

Outcome: A stronger, faster, and smarter protocol defense posture after recovery.

Live Replay Demo of How Failsafe Monitor Works

Historical replay simulation on exploited transaction on https://monitor.getfailsafe.com

Alerts triggered on Rule parameter monitoring for large transacted amount on Block 22785461

An automated alert system can be configured when this Alert triggers, informing the incident response team and triggering an automated contract pause.

Final Thoughts: What If the Response Was Ready?

While the Resupply exploit is still unfolding, one truth is clear: response time can be the difference between $10K and $10M in damage. FailSafe Monitor exists for this exact reason to empower protocols with visibility, control, and decisive action in the face of risk.

To learn more about how FailSafe Monitor can improve your protocol’s incident response readiness, visit https://eleoslabs.wpcomstaging.com/risk-monitoring

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