• Proposal
  • OIP-112: Align TRIBE Voter Interests with Fuse Exploit Victims

Summary

Allow the DAO to coordinate a proposal that will include incentives for TRIBE holders to vote in favor of full repayment for Fuse exploit victims. 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.

Motivation

As a depositor in Rari Capital Fuse Pool 18, Olympus lost 9.6m DAI (out of the deposited 10m, according to this sheet) in the Fuse exploit that occurred on Saturday April 30 at around 2:20 AM PT. In the past, efforts have been made to get these funds back through governance proposals, but ultimately the Tally on-chain vote failed after the Fei Labs team switched their stance.

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. 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 30% of the exploit. 

Even though there has been pushback, and there are enough funds to pay everyone back, the Fei Labs team has stood by their stance of paying out this exploit from funds directly associated with Rari Capital (source):

However, they did note they would support any decision made by TRIBE holders (source).

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.

Proposal

Incentivize TRIBE voters to vote for full repayment of hack victims in a win-win scenario:

  1. TRIBE voters who wish to receive the incentives delegate their votes to Olympus (0x245cc372c84b3645bf0ffe6538620b04a217988b) prior to the vote.

  2. Olympus will set up a contract to take receipt of repayment and distribute automatically to victims.

  3. 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.

  4. 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

  5. TRIBE voters who delegated to Olympus will receive their pro rata share of the incentives

Thus, Olympus or its Treasury would not be exposed to risk. Additionally, 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.

Polling Period

Due to the time sensitive nature of this proposal, the polling process begins now and will end in 48 hours. After this, a Snapshot vote will be put up. 

Poll

For: Allow the DAO to incentivize TRIBE holders in order to enact full reimbursement of the Fuse exploit

Against: Do nothing

Informal Poll

This poll has ended.

    What would prevent people from transferring their TRIBE to a new account and double dipping?

    Also, isn't the maximum incentive that could be offered pretty low? (Certainly less than the loss of Intrinsic Value they'd have to vote for)

      TropicalRogue I believe the users would only be able to delegate once and then the rewards are pro rata based on delegated votes.

      I'm supportive as it appears a minimal risk for financial recovery.

      Aligns incentives and will hopefully bring a better outcome. I fully support this.

      No brainer. Full support.

      What will be the incentives for the people who will delegate the votes?

        triangulair As written in the proposal, the incentives would be paid from the reimbursed amount, so whatever Fei's treasury ends up being composed of. They're currently voting to consolidate the Treasury and it is looking like they will be holding stables.

        As a tribe holder I understand that I will receive less if I delegate my vote to you. Since you will be refunded even if you share a part of this refund, we will receive way less.

        • JaLa replied to this.

          triangulair The point of the proposal is to ensure that is not the case. The incentive should be structured so that you would not receive less.

            JaLa think you would need to offer more to incentivize not less or same

            Instead of making a smartcontract to give incentives to voters who vote in favor of full reimbursement, we can just commit to incentives to Tribe holders who vote in the favor. And we can decide and allocate a grand amount of incentives. Once vote passes in favor and everybody gets their fair share from feirari, we can do analytics of-chain and distribute incentives. Just like retrospective airdrops are calculated and distributed

              smartboy21 We would allocate incentives to holders that delegate before the vote is live, to maximize outcome for everyone and make sure people don't just pile on at the end if we win the vote and with that reduce incentives for others.

              As for the smart contract side, we would definitely prefer this being automated and everything on-chain, trying to make this as trustless as possible.

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