The dust is settling.
Many unanswered questions are left lingering.
Who did it?
How was it done?
Can the funds be recovered?
Of these three questions the only one that matters to me is how it was done so we can prevent it from happening again. Although even that question might be moot considering the next implementation of any kind of wrapped ETH token will be x100 more secure.
In the highly likely event that those 330 ETH can't be recovered, what do we do? I'd like to propose a bailout (or perhaps bail-in depending on how you look at it).
We simply airdrop LEO onto the people that had ETH stolen.
I think we need to ask around and see how many big LP providers would find this solution acceptable, and we also have to set a reasonable price for LEO.
When the hack went down LEO was trading at ATHs and was worth 27 cents a coin. I'm actually pretty surprised we've recovered as much as we have so far.
Honestly this is pretty impressive.
I'm very surprised that more dumping has not occurred.
Gogo LEO fam.
In any case.
We'd obviously have to set a price for this bailout far lower than the 27 cent ATH. I was thinking something like 15 cents given the circumstances. So say you had $1500 locked in the Uniswap pool... you'd be "airdropped" 10k LEO coins to make it right.
"Airdrop"
It's really more of simply transferring coins out of circulation into circulation. LEO has a dev/bounty fund of ~5M coins in addition to the ~5M coins in circulation. This 'airdrop' would cut into the bounty/dev fund pretty deeply, but that's pretty much the only option I can think of.
Good thing?
If we take money from the dev/bounty fund and airdrop it onto accounts that got hacked, that actually increases decentralization of LEO quite a bit. Big money is being transferred from one entity to many. LEO investors might even find that this solution was beneficial to them in the long run.
What do we do with the ETH that was saved from theft?
That's still leaves around 120 ETH to distribute that was not stolen. Personally I think we should ask all the big accounts involved if they would be willing to accept a buyout using 100% LEO. That way we can save that ETH for the accounts that are salty about the situation and just want their ETH back.
Obviously the most "fair" way to do it is to just distribute the ETH equally to all those who were affected. However, why employ this solution when many of the LEO whales are more than willing to take the buyout via LEO at a good price. I think we'll need to set up a poll or just ask the big LPs directly. I'll leave that to @khaleelkazi.
Because ETH gas fees are high, it might be hard to reimburse small accounts with ETH. We might have to sell ETH into Hive and buyout smaller accounts that way (zero fees on Hive and Hive has good liquidity).
Bad Debt
This reminds me of the MakerDAO bad debt kill switch scenario. When bad debt is sitting in MakerDAO smart contracts the network must print Maker coins to pay it off. We pretty much have to do the same thing here with LEO, except the coins don't need to be printed because there is still an obscene number of coins in the dev fund.
Conclusion
In the extremely likely scenario where we cannot recover the stolen ETH funds, I think this bailout option is pretty much the only solution to get people's accounts right. By offering this buyout at a fixed price it essentially forces those users to double down on LEO and become committed investors (even more so) just like an actual bank bail-in (comming soon™). This is especially true considering we just lost all our liquidity and we're back to trading on HE.
It's not the end of the world.
Someone cast a Life spell on LEO and give it some heals.
Sorted.
Im not being funny but people who provided liquidity on defi should have known the risks involved with what they were doing. Defi is incredibly risky for many reasons and personally i wont be getting involved ever. Stake this coin for that coin for another coin for another coin. Stake your flamingos for eagles, its ok because everyone else is doing it, its completely INSANE. Greed is the only thing going on here. Having said that my heart goes out to all those who have lost money. If i had lost money id be hoping for a bail out but for me it depends on where the weak link was and ultimately where the blame lies. If its something developer related then i think the only solution is to dig into that developer fund and work double hard to offset the situation if you truly believe in your mission. Lets hope the worst is over and lets build from here.
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I don't know about the airdrop but then something would be done to calm the storm it's of course very necessary. I think to currently be trading at 16 cent is awesome Just from yesterday's hack alone. I think I'm surprised myself, Leo is still my best bet anyday anytime
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Yeah not supposed to use liquidity pools with deflationary coins, i just heard about this but sounds similar to the STA hack possibly? I saw this coming and was wondering why they would wrap good hive leo up in crappy eth anyway lol!!
https://www.google.com/amp/s/cointelegraph.com/news/defi-protocol-balancer-hacked-through-exploit-it-seemingly-knew-about/amp
Leo is pretty inflationary.
There's like 73% APR on scooping upvotes (self upvoting or circle jerk).
10k powered up is 2 coin upvote, 20 a day, 7300 a year.
We are creating inflation on 5M coins out of circulation.
Is the LEO team thinking of a way to compensate those who lost money?
I thought it was all a part of the UNISWAP game: you can get GREAT returns, or, you could lose your money.
Easier to say when you didn't lose money...
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It’s an idea for an unfair situation. Maybe a vote may be in order.
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well, I am one of the ones affected... Did not manage to take out anything as I was out :-P
I guess I would not mind getting LEO at a discounted price for the lost ETH but getting compensation for the rest in LEO is better than not getting anything at all
I took a risk, as most of us here and would just be happy to get anything back at this point
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!ENGAGE 20
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ENGAGEtokens.Bail out, bail in, however you wish to call it... is an interesting idea.
My 2 cents is to maybe spread the distribution over time (like 4 weeks power down style) so that any potential selling each week could be easily absorbed and not crash the leo market.
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Well it sounds like a good idea to me!
Why all those complicated solutions?
In #1 those people recovered their still available ETH, and the wLEO they had before their ETH was taken in custody is respected. In #2, the workings of Uniswap are respected and every LP received what could have happened even without hack.
Meanwhile, LEO is holding up very well.
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Taking from the dev pool makes sense as it was the devs that wrote the bug into the contract?
I think there is no bug, The hacker stole the private key I mean.
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If the private key was exposed, that is obviously a bug?
Leaking the url to the server that allows minting infinity money, if I read it right.
I think they stole the keys from the server, but not for a bug in the smart contract I mean.
Regards
Yeah, this is as fair of a solution as probably could be thought of. Makes something good out of a bad situation. I'll be interested to see what other potential scenarios get floated about.
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