Fully Repay Fuse Bad Debt
Proposal from Olympus DAO to amend TIP-121 to fully reimburse Fuse exploit victims with PCV.
The current version of the proposal includes ~$14,820,000 (57M Tribe at intrinsic value of $0.26 per TRIBE) repayment to victims. Using the latest numbers posted by Fei Labs, full repayment is $41,850,306, meaning an incremental payment of ~$27,030,306.
Although Olympus and other victims believe full reimbursement is the just and fair option, we also recognize the reality of the current incentive structure. Wanting to be practical, Olympus and others are prepared to offer part of the reimbursed amount, up to $9m, as an incentive to holders delegating to Olympus for the forthcoming votes.
Recently, Fei Labs published a proposal to wind down the protocol, liquidate the holdings and allow redemption of FEI and TRIBE. This proposal, referred to as the “Status Quo” below, includes the refund of Fuse exploit victims, however only using 57M TRIBE from the TRIBE/RGT peg exchanger utilized in the merger and select other assets. The proposed plan would result in full repayment to smaller depositors, while leaving larger depositors (Frax, Olympus, et al.) with cents on the dollar. In total, the weighted average repayment would be approximately 33% of the exploit. However, Fei Labs has clarified that it would support the decision of TRIBE holders with respect to the exploit, including full repayment.
Currently, the incentives of TRIBE holders and Fuse exploit victims are misaligned. While we believe full repayment is appropriate and fair, we need to be practical with respect to the “rules of the game” before us. As such, we would like to flip the script and offer a solution to ensure a more equitable and mutually-beneficial outcome vs. the status quo.
Fully reimburse the Fuse exploit victims in a win-win scenario:
- TRIBE voters who wish to support our proposal and receive the incentives, delegate their votes to Olympus (0x245cc372c84b3645bf0ffe6538620b04a217988b) prior to the Snapshot and Tally votes.
- Olympus will work with the Tribe/Rari developers to ensure reimbursement is done swiftly and as trustlessly as possible.
- Any account that would have been made whole under the status quo will still be made whole and will not need to participate in the incentives.
- Any account that would not have been made whole under the status quo will remit the incentives on a pro rata basis based upon the difference between the status quo and full repayment.
- As per the Status Quo, all victims will provide releases for the team and Fei Labs as part of the reimbursement.
- TRIBE voters who delegated to Olympus will receive their pro rata share of the incentives
The incentives would be paid from the reimbursed amount and would thus be conditional on the successful passing and executing in favor of full reimbursement to the affected parties as part of the TRIBE wind down.
ADDRESS TO DELEGATE TO: 0x245cc372c84b3645bf0ffe6538620b04a217988b
INCENTIVES: up to $9,000,000, capped at $0.10c per delegated vote
Olympus has developers looking into how to best structure the technical implementation of this proposal. We would like to invite the Tribe/Rari developers to work with us so that the reimbursement and liquidation processes are finished as soon as possible for the benefit of all victims and TRIBE holders. We would defer to the Tribe/Rari teams when it comes to the exploited amount calculations and can help verify as a victim.