In 2021, Fei Protocol (the stablecoin) did a merger with Rari Capital DAO, developers of the Fuse money market, The merger passed overwhelmingly and $RGT tokens became $TRIBE tokens effectively sealing the deal. In late April 2022, the Fei-Fuse money market was drained due to a reentrancy bug.
Many early adapters of Fuse lost millions. Fraxfinance a huge FEI/Fuse backer+lender+user lost ~$13m. OlympusDAO lost ~$9m. The total hack resulted in nearly $80m lost. The FEI/TRIBE DAO, had 100s of millions USD in excess PCV at this time & held a governance vote where TRIBE holders voted overwhelmingly to reimburse all victims of the hack. They were applauded for this exemplary and ethical move. Then weeks went by no repayment. Then in May/June 2022, the crypto markets took their infamous downturn. Then FEI emerges with an insane proposal: “Let’s do the repayment vote over again, the last one didn’t count.” The egregiousness of this is wild and absolutely ridiculous. Of course, as you might expect, to no one’s surprise the vote does not pass this time the repayment of victims is off the table now.
Cobie, Co-Founder of the Ethereum Blockchain had a good thread on Twitter explaining it. FEI didn’t want to repay victims because their stable coin peg and treasury value is dangerously low. While passions were high, their supporters (including those at FRAX) were patient. This TRIBE/Rari scenario is a complete mess. Hard to be more bearish on DAO governance than after following this.
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https://twitter.com/cobie/status/1537220039522545664?s=46&t=em_UL2MEmJJT5dWPGty6RA
In April, $80m exploit on Fuse happened: While not the hot topic on Crypto Twitter, the post mortem on the recent Fuse exploit is live. It analyzes the nature of the vulnerability, the response from the team, the current problem that need solutions, and additional security measures being taken. FEI, has more than enough PCV to redeem every stable-coin at peg, repay every cent to victims, and STILL have ~$65m in value for $TRIBE holders to redeem and profit. But what are they doing instead? Giving FRAX, Olympus etc cents on the dollar leaving victims with 95% hack losses. If, FEI repaid every hack victim, redeemed all FEI at peg, then distributed the remaining treasury pro rata to TRIBE holders, TRIBE would be worth $.16 with 10s of millions USD value given back to holders. A graceful and perfect sunsetting
Instead of the above, They’re preposing repaying FRAX 2% of $12.3m lost. 3% of OlympusDAO’s $8.9m lost. And just 19% and 27% of BalancerLabs and VesperFi losses respectively etc. Why? How does this make any sense other than fraud.
An honorable, ethical and respectable shutdown of a DAO is literally perfected here. The money is there. The full repayment, the perfect peg redemption and moral precedent is possible. I truly don’t understand how it’s possible to look at this, then decide “let’s take the rest.” Sam Kazemian said;
The post in the Tribe forums resonates greatly on the upheaval within the FEI Protocol . It straight up calls them out for simply wanting to keep more money for themselves at the expense of their early backers+friends solely because they probably think they can get away with it (they won’t). This is truly one of the most mind boggling situations I’ve seen. Outright fraud, blackhat hacks, scams/rugs are obvious. Difficult situations are also obviously difficult. This i don’t understand what this is other than chaotic. This is a public VC backed, tier 1 project.