Agree that many of our common Fei/Tribe users (or holders) are very much concerned about the staked fund (whether it can be retrived), as well as the future security/development of the protocol. In my limited eyes, it is equally important to improve the system security as well as the user/holder faith (and brand). Every great project encounters some hiccups one way or the other, though the way handling them makes the difference.
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This is a really good point
we believe the risk of angered users taking real-world action against Fei labs in some way shape or form will end up being even worse for the protocol than reimbursing, and create more hinderance to the team continuing good work and development than reducing PCV by < 20%
We have seen recently how claims with a lot less merit are disrupting DeFi teams like Uniswap and even Pool together.
In this case, with so many individual users affected, the odds of a lawsuit are quite high. This would greatly impact the brand and disrupt the development and focus of the FEI & Rari teams.
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Tribe members should see further than the immediate cost of reimbursement. Having access to a large swath of capital that can be used as an insurance in case of hacks is definitely a strength that is valuable and hardly reproducible by the competition.
If prospective users are confident that they’ll be reimbursed in case of hacks, they’ll use the protocol much more, since they don’t see it as risky. On the contrary, if the losses aren’t compensated even though a reimbursement was possible, then it will be very hard to value the protocol in the future and Fuse will become a net loss for the Tribe.
I think playing the long term game asks for a full reimbursement and this will benefit the ecosystem as a whole.
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I’m bringing this discussion to last call. The Snapshot vote will use approval style voting with the following options:
- Make the community whole
- Do not make the community whole
- Discuss alternative solutions
Voting to make the community whole entails the DAO repaying the bad debt on behalf of the hacker. Following the outcome of this vote, the Tribe DAO will not be providing any future insurance on Fuse until further discussions have been had and an explicit policy has been approved.
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Candidly I’m not sure how selling the Treasury at these market prices solves any of the issues at hand. This would only lead to sell pressure on Tribe which would inevitably mean that Fei currently paired with Tribe in Uniswap gets redeemed against the PCV. Issuing any form of buybacks doesn’t help either as this only reduces the collateralization of FEI when we need to increase it.
Frax seems will approve the FEI-FRAX OTC deal, which will bring 30M frax stablecoin into PCV, without costing current PCV(I guees will use Procotol-owned FEI).
In this case, could we estimated how much assest should we sell for the full reimbursement?
It would be better to have a quantatively view about the PCV.
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As someone who lost funds in the hack, I don’t feel comfortable trying to time the market when it comes to selling treasury assets to reimburse the stolen funds. Yes, it sucks that the market has gone down since the exploit and more assets will have to be sold to buy back stable coins. If the market only continues to go down then reimbursement will be even more costly and I don’t want that to be the reason that rules out a reimbursement.
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Dont think timing the market should be at issue here— market could have gone up making it cheaper for PCV. As you can see this very statement makes many people feel dubious on its face…
In fact Tribe has held up in the past 2 days due to people likely buying to vote in the upcoming snapshot…
After these types of comments have to say am glad team does not vote… if that is the truth.
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@joey @JackLongarzo The smartest thing is to fully refund, gain the trust of the community and partners, even more so in turbulent markets, continue building, in a few years the market will be huge, it will not be limited to hundreds of thousands of people and protocols counted on our hands, the market is going to be billions of retailers, thousands of protocols and institutions, and at that moment we are going to look back and this is going to be the cornerstone that kicked us off to get there as one of the major money markets.
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Sorry if it was unclear but by treasury assets I meant just the Tribe in the treasury. The PCV is what is in question here which I personally believe we should be using to pay back the hack debt. My message was in opposition to selling Tribe to pay for the hack.
Then we apologize-- yes we agree that PCV should be used not tribe. or as minimal tribe as possible.
What about the FRAX which was recently acquired?
If I am understanding danielvf post above correctly, the auditors suggested the change that lead directly to the hack. I don’t want to start a mob with pitchforks, but we should reach out to them to get their side of the story. It is a small company with 5-20 employees operating out of Brussels, so I doubt they could cover the $80M but I find that a little suspicious. Maybe they contracted this specific section out to a subject matter expert they know in this specific field, it could possibly lead to clues on who could of done this hack. I know mistakes are made all of the time with new tech like this, but I would like to hear what they have to say about it.
The frax has yet to be acquired and will require governance approval on both sides. If approved this will reduce the hit reimbursment would take to the PCV significantly.
pls sir mi familia. rari is the best protocol and full swift reimbursement the best path. will be avid supporter if this passes
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@JackLongarzo you’ve been fixated on using the PCV as a piggy bank for Fuse hack payouts, I realize that Fei community was tricked once in doing it for the previous hack, but you know the “fool me once shame on you, fool me twice shame on me” thing, we’d have to be idiots to believe that after this payout anything will change in the way things are done
where is the rest of the Rari team? what happened with 1+1=3 feels more like 1+1=0.3? does anyone know anything about the actual merger deal beyond 1RGT = 26.7 TRIBE?
obviously, make the community hole is the only option - but let’s focus on discussing the timeline for it, let’s discuss what other assets are available besides the PCV.
Based on this thread FIP-104: Fei/PCV Reinforcement Proposal - #20 by Alics the current PCV can barely cover all of outstanding FEI and you want to dip into it for $50M, how will FEI keep its peg if its under collateralized, by using TRIBE to backstop it? isn’t that the same as settling the hack with TRIBE from the treasury but without the possibility of a bank run or lost peg
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Just wanted to comment that : OTC of 30M FEI for 30M FRAX will add 30M$ of assets to the PCV (FRAX) but also add 30M of liabilities (FEI) to the protocol, so this is neutral and won’t ‘reduce the hit’. But at least the protocol will hold FRAX, and if the PCV is used to pay for the hack’s bad debt (part of which is denominated in FRAX), then this FRAX will already be held in PCV & won’t need to be acquired through other means.
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Looking at the 1) current market conditions and 2) FEI’s collateralization ratio is now <2, I am not sure if it is really prudent to take out additional $50M from PCV. That will push down our PCV further thereby risking FEI’s peg and with the way stable coins have been under duress, I am not comfortable with taking that chance. At a minimum, can we delay this by around 2 months as things stabilize and revisit then?
It is prudent to do things quickly. Resolve the issue of the return of funds urgently. And start working normally. There are users, protocols that cannot use the services. And continue with the construction of FUSE, the debate of the guarantees. On stormy days you have to pull the boat out, and lead the market.
When there is weakness, show strength. That way, trust is restored. And in the long term, the protocol will be rewarded with a greater market share.
With ETH crash, the size of the hack (and compensation) is probably also smaller.
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