I see a few problems with the proposal:
There has been insider trading before it was posted. Around 500k$ of Tribe have been bought 10h before the proposal was put on the market. Fei Labs is, as usual, playing against the users. I hope the SEC will look into this, because really, you guys deserve it. In the meanwhile, I propose to prevent those addresses (and the ones linked to it in case they sell) from voting.
No numbers are given. Lack of accurate numbers regarding the execution creates a strong asymmetry in favor of Fei Labs. This is not a vote, this is a manipulation. The excuse “we can’t estimate the PCV at the time of the vote” is, sorry for the slur, bullshit. You ran those calculations yourselves and, if you were truthful, you’d disclose them. We could at least know how you plan to calculate it. @JackLongarzo you tell us “all but a handful”. Can you explain what are your estimations for the cap? How many addresses are “a handful”? Unless the interval is [0,inf], you must have ran some calculations, right?
The 30% retainer on the vesting is pure theft from the Rari team. How much is the rest worth? I highly doubt it will only "cover the costs - for which no precision has been given. Please give us the expected gain and the expected costs - else it’s just corporate theft. Winding down operations of an already dead (killed?) protocol shouldn’t be very expensive.
Rari has stopped borrowing, told users to repay their debts, then pulled for 1,7M$ of liquidity - repaid by the users. This has to be used to repay hack/rari’s victims.
Rari team, being responsible for the contract’s vulnerabilities after they chose not to follow the auditor’s recommendations, should not gain from this situation, especially when users will still be in loss. Same could be said about Fei Labs, which abandoned the project (aka “soft rug”). Why should they be allowed to farm the liquidity?
Fei Labs, after supporting a hack repayment, chose to veto the community vote, and now proposes a slightly degraded version of it. I think trust has been broken, and I can’t believe such vague proposal probably overlooked by an army of blood-thirsty lawyers will be in the users’s favor. In fact, it’s not as the Fei Labs/Rari teams will get a much better deal this way than if they had kept with the initial community vote.
What I propose, by priority:
- Full reimbursement of the retail users using the PCV (including Babylon - the vault contracts were noncustodial and thus, funds were owned by their users)
- Depending on the PCV state, repayment of the largest DAOs.
- Dissolution of Tribe, allowing a claim for the intrinsic value.
Thank you for the proposal. Can you clarify on the BAL and gOHM?
- Had previously been under the impression that those assets were not part of PCV
- What is the mechanism for moving the vebal?
- Will this supersede FIP 108 (unwinding the the GOHM swap) if that reaches quorum?
Given the size of the LUSD holdings (18.7M) would it be beneficial to allow users to redeem FEI 1:1 for their choice of either DAI or LUSD instead of swapping the LUSD for DAI?
As a TRIBE holder since genesis this is a sad day for us all.
I would like to propose Tribe DAO sells off the $INDEX holding for something more liquid via an OTC deal, similar to how it was acquired. The proceeds can be distributed to TRIBE holders as stETH.
Distributing 1% of INDEX total supply will most likely lead to dumping if meaningful or a lot of dust if it averages out to be near nothing. If the INDEX finds its way to market it will crush the token price, as there is limited liquidity and it risks creating a decentralised fire sale like situation ie: Dump the airdrop.
I propose a tokenswap, stETH for INDEX. Is this something we can explore offline ?
@FeiLabs - would it be possible to update the forum post to show INDEX as an OTC deal ?
I would also like to express interest in the veBAL holding as well and to be apart of the bidding process for that asset.
This proposal is quite dense and I want to make sure the decisions being proposed are well understood and that it is clear where Tribe holders and Fuse hack victims will be left if all of the above is executed. The distribution of the PCV is entirely in the hands of Tribe holders. Tribe holders have the power to decide which assets and how many assets are used for a hack reimbursement and what is to be distributed to Tribe holders.
The proposed reimbursement distributes the 7 day time weighted intrinsic value of 57m Tribe following all clawbacks to hack victims. The funds will be distributed equally to each affected address capped at the dollar value lost. Given the way this is structured and the current value of the assets in the PCV, almost all addresses will be made whole but a handful of the larger victims will only be partially reimbursed. Given the volatility of PCV assets, the exact numbers cannot be calculated until a time weighted price of Tribe is locked in. All outstanding FEI will become redeemable for 1 DAI and the remainder of the assets in the PCV will be distributed to Tribe holders.
The proposal currently does not consider the ~1.7m in accrued Fuse fees. Tribe holders can elect to use these however they like. We continue to think it is appropriate to use these funds to further reimburse hack victims. To that same end, we would also like to continue to encourage discussion around a complete reimbursement for all Fuse exploit victims.
Much like Fei Labs, the Rari Capital team will no longer be contributing following the outcome and execution of this proposal. Because of this, we support executing a clawback on the current Tribe and FEI vesting to the Rari Capital team. The Tribal Council has the authority to do this. We will also be giving back 30% of the unvested contributor Tribe to the DAO treasury. The remainder will be used for administrative and other costs necessary to wind down Rari Capital operations.
Thanks for starting this discussion. Please be more active, and share opinions with the community. The proposal of 0xMaki, Frax Finance, OlympusDAO, Tetranode, 0xb1, and Babylon FInance, seems to me the most coherent. Retail should be top priority, honoring the tokens that users provided, followed by DAOs.
It would be great if someone could post some example math as there are a lot of things that seem unclear to many of the people trying to figure it out.
Starting point linked above
Can we get clarity on how Babylon users will be treated? 1540 users lost 3.1M through 10 different smart contracts (strategies on Babylon).
Probably the highest numbers of affected retail users come from our contracts.
Can you confirm that all Babylon users will be treated as retail?
Here are the addresses of the smart contracts that pooled the funds of our users together.
0x2E07F9738C536A6F91E7020c39E4ebcEE7194407 0xdB02Fa1028Ecd62090b4fF5697812cbec8aE775b 0xbf2647e5319cFbbE840ad0fafbE5E073E89B40f0 0x11b1f3C622B129212D257d603D312244820cC367 0x69B9a89083E2324079922e01557cAfb87cd90B09 0x2d160210011a992966221F428f63326f76066Ba9 0x864870BbBe514476dF4f806B169DBE5C9b7ddcaB 0x7087Ea2702DC2932329BE4ef96CE4d5ed67102FF
Thank you for contributing to the debate, I think it is necessary to comply with retail first as was discussed initially, they are the most affected group. And build on the foundation of trust.
This is very important. I am one of the users affected and even when the funds were pooled via smart contracts (strategies on Babylon), we must receive equal treatment as retail users.
I am a user through babylon as well, in the pooled contracts. It is important for all of us individuals to be treated as individuals in this situation. Thank you for your help.
We need some clarification on some stuff.
How much $TRIBE would be eligible to receive reimbursement? Do people that front run the proposal get to receive payment? If so why are you enabling Insider Trading?
If Fei Labs is no longer involved does that mean they will not be delegating via their team and their company to swing the vote?
We need a firm time frame. I believe that we should do it on a vote basis. Any accounts that vote (against or in favor) on the proposal should receive 2/3rd on a per token basis of the PCV compared to the remaining tokens that did not vote. This will protect retail. THIS WOULD ALSO APPLY FOR RARI HACK HOLDERS AND EASILY MAKE THE DEBT DISAPPEAR.
That is basically it. Insider trading shouldn’t be supported and clarity is needed. If it is intentionally vague, that could just mean you guys are doing it purposefully to front run it…
There are some clear issues with this proposal:
The focus should be on the liability/creditors first then the equity/token holders. The execution should be done in stages, then the snapshot of TRIBE holdings should be given a specific date, 24 hours to 7 days in the past to compensate actual TRIBE holders that lost value from holding the token.
FEI holders: FEI holders should be given a specific timeframe to redeem FEI for DAI, after the timeframe, depending how much FEI is still locked in LP (e.g. Frax Finance etc.) the equivalent amount of DAI should be reserved for locked LP.
Fuse hack victim: If protocol FEI is not redeemable for backing, it is clear that the DAO can repay Fuse hack victims fully. This should be the priority before talking about distribution to TRIBE holders. The victims did not opt to receive equity/TRIBE tokens, they should be compensated first in whatever they lost, the proposal was passed to compensate the victim, the second proposal against compensation was influenced by the team.
- The next step is to wind down partnerships. Distributing tokens acquired through partnership is not optimal for partner DAOs for obvious reasons (incentive misalignment, illiquidity of partnership DAO LPs), there are also proposals passed on winding down partnerships, which should be executed first before this proposal.
- TRIBE holders
- Any remaining assets can then be distributed to TRIBE holders. The snapshot of TRIBE holders should be a date in the past, for example, to the point before the price of TRIBE started going up minus any address that sold between the snapshot date and distribution date. Anything the DAO is able to recoup from the hack in the future can be distributed to TRIBE holders in the snapshot. There are transactions of large buys before this proposal being posted in a down market, it does not seem right.
There are good reasons why creditors > equity holders in tradfi and this principle should be followed in this situation to make all stakeholders whole. Equity/token holders should be the risk bearer of the hack theoretically since they get any potential upside of Fei/Rari doing well. Fundamentally, LPs (Fei/Rari users) would have been confident about the DAO’s due diligence on contracts and insuring products/services provided by the DAO in the absence of third party insurers.
Alternatively, the DAO compensates hack victims with protocol owned FEI redeemable for DAI, then Fei Labs can still step down, the community takes control over the DAO.
Why does this proposal explicitly separate the dissolution of the treasury and the hack repayment.
It needs to be revised and more numbers need to be given for clarity.
It is not clear that “hack victims” are “Creditors”
Hack victims lost assets because they took risks. This does not represent a debt. While it may end up being repaid, I think it’s important to point out that this is not in the same class as FEI holders, for example.
Any repayment would need to pass the DAO, which did not happen last time it came up.
Why do you think they are not creditors? Using a DeFi product should not present significant risks to the end users. The victims take risks - liquidation risk, illiquidity risk etc., not risk of poor due diligence. No one is going to use the product/service being offered if users lost confidence in the DAO not compensating the hack victims, and then it is just a death spiral for the DAO.
While I am not personally affected by the hack, I was involved in other protocols that acted in good faith after significant risk events, e.g. InsurAce commitment to make their LPs whole after paying out UST depegs, Scream directs future protocol revenue to victims. Compensation should be committed to the hack victims even if over a longer timeframe, but in this case, the DAO can clearly afford to pay them out.
The DAO could have afforded to pay them out when it was voted on too-- however they voted against it.
I think those who took risks by using Fuse accepted that, in the event of an exploit, they may lose their money. There should be no expectation of repayment. The same is true when you use Aave, Compound, Maker, and whatever other lending protocol. Also, given that the DAO is dissolving, it makes far less sense to repay hack victims for future prospects or “good will”. I suppose we’ll see how the DAO feels this time around when it comes up for a vote.
Aave literally has an insurance fund…
@FeiLabs and @JackLongarzo - can you please provide the projected calculations behind the proposal? It is going to be near impossible for the community to reason about the proposal without a shared understanding of the financial implications for all stakeholders. I’ve attempted high level calculations myself and the recovery figures don’t make sense.
Here is a quick updated overview shared from a friend (original credit to DCF_god):
The left side shows the net intrinsic value of TRIBE as proposed (using 57M TRIBE), the right side shows the intrinsic value after a full recovery for hack victims from PCV. The price of TRIBE was approximately $0.144 before any “odd” price action ahead of the public release of the proposal. This calculation shows that all FEI users and hack victims could be made whole and each TRIBE would still be redeemed for a 10% premium to the pre-annoucement market price.
Instead the proposal suggests compensating hack victims with an arbitrary amount of TRIBE which feels like a backhanded way of saying let’s just repay approximately 28% of the hack amount so that we can keep the rest. Furthermore, the 28% is unevenly split so that some DAO’s are 100% compensated while others receive as little as 3%. Then you want to pocket the rest and just go on to your next venture? Do you think it will be that simple? Many of the large TRIBE voting positions are known and the Tribal Council are known individuals. Why would you want to leave yourself this liability when it would be very straightforward to make everyone whole. If it weren’t for the Council’s previous veto the hack victims would already be repaid and this would be a much simpler dissolution. We risk a repeat of that situation where PCV drops as the market falls and it’s a shame because it will then be used as an excuse for why repayment can’t happen (the sad comedy is if PCV pumps into the merge afterwards).
I’ve been in this industry since the early days of Ethereum and this feels so greedy to me. You use terms like “Tribe” and try to harness the goodwill and positive sum attitude of Ethereum and yet here we are. Think about your reputations going forward - either way Fei is done. You have a chance to make everyone whole, move on cleanly to your next thing and still have $65m leftover for TRIBE holders (which was approximately the market cap of TRIBE before the announcement). Why not take it? Is an extra 50% really worth it?