Proposal Name: Repay Rari Hack Victims with frozen Apecoin collateral in Fuse Protocol
Proposal Category: Core: Ecosystem Fund Allocation
Abstract | In April 2022, DeFi Lender Rari Capital/Fei Lost $80M in a Hack, with various assets including ETH, FEI, FRAX, RAI, DAI, USDC, LUSD, wstETH, USTw, WETH, USDT being drained from collateral pools. With borrowing frozen, victims have not been able to withdraw their collateralized Apecoin from Fuse pools.
- More details and public record: DeFi Lender Rari Capital/Fei Loses $80M in Hack
One of the “Fuse” pools within the Rari Platform which allowed collateralization of ApeCoin, Pool 127, was among the many that were compromised: https://app.rari.capital/fuse/pool/127
While Apecoin itself was not drained, the collateral is now frozen totally roughly 300,000 Apecoin, and there is no clear roadmap to these funds to be withdrawn after months of silence from leadership at Tribe/Fei. While their DAO has approached the idea of a formal plan to repay hack victims, Apecoin holders who provided this collateral are not eligible for direct hack repayment and are reliant on a volatile protocol that may not provide an opportunity to reclaim funds.
This proposal seeks to leverage the goodwill of the Apecoin DAO and community to grant Rari Fuse pool 127 victims with up to 337,532 Apecoin so impacted members of the community can be made whole. (Based on calculation on September 7, 2022)
Motivation | This relatively low cost action would help deploy Apecoin treasury reserves in a meaningful way that would create significant goodwill for the community and generate positive PR around the strength of the DAO. There are several notable figures in the community who would benefit from this action, who would certainly amplify a positive outcome. Disclosure: The creator of this proposal Bored.eth has an 80,000 Apecoin position in the Fuse pool that was impacted, accounting for 26.6% of impacted funds. If this proposal is approved, a detailed accounting of Apecoin victims and respective collateralized Apecoin that are frozen will be provided to Apecoin Foundation administrators.
Put simply, due to the unfortunate hacking incident, there is a substantial amount of Apecoin that is effectively removed from the ecosystem, and thus not being put to good use. If one considers those coins “burned” right now, this grant is simply trying to bring things back to zero.
To avoid any risk associated with the Fuse Pools residing in the Rari Capital application, this proposal suggests granting victims Apecoin directly via a multisig wallet managed by Apecoin DAO. Impacted wallets would be gathered via public on-chain platforms such as etherscan.
Steps to Implement
Enter steps to implement
- Upon successful vote to move forward, an accounting of frozen Apecoin collateral is provided to Foundation, inclusive of wallet IDs and amounts.
- Funds are dispersed promptly to hack victims.
- Victims sign an acknowledgement stating that if Rari/Tribe/Fei do eventually repay victims for frozen Apecoin collateral, that victims in good faith will find a way to return excess Apecoin back to the community. While the Foundation is not equipped to accept repayments, victims will be expected to leverage the Apecoin towards donations or grants that serve the community in a positive way.
Timeline | Considering the murky future of Fei/Tribe, it is imperative that action is taken sooner than later to make victims whole before protocols are further disabled.