Compensation Plan part 1 (out of 3)

bZx Improvement Proposals
#1

After having good community discussions on telegram and discord, it seems there is consensus to at least try to have everybody compensated. However, the treasury isn’t big enough to compensate everybody immediately, and various options are still being discussed. One thing is clear, that in order to compensate everybody, bzrx must flourish which is certainly possible with the help of some great community spirit!

To simplify matters, there are 3 groups that need compensation:

  1. Potential DAO participants, e.g. BZRX holders, P/BGOV, iBZRX stakers on BSC and Polygon
  2. Fulcrum and Torque users on those respective chains
  3. Personal wallets that have been emptied due to unrevoked permissions, and other casualties.

This proposal starts with Group 1, as it is the easiest to compensate 1:1, since the treasury is mainly in bzrx and vbzrx. Currently we have around 43.4 mln bzrx in the treasury (and 355 mln vBZRX).
Polygon lost 32.7 mln bzrx,
BSC lost 9.8mln bzrx.
Team lost around 22 mln bzrx, which they will not want to get compensated. This leaves us with a total of 20.5 mln bzrx.
After compensating group 1, the treasury will have 43.4 mln - 20.5 mln = 22.9 mln bzrx left in the treasury.

There are a couple of reasons why we want bzrx stakers to be rewarded in full.

  1. They have been loyal supporters of the protocol, they will most likely not dump their bzrx (compared to the other groups, not saying they will, but some might…) as they believe in it’s longtime value with the rebrand around the corner.
  2. They need the bzrx back ASAP in order to participate again in the DAO voting (and create a strong participating community)
  3. They are our brothers and sisters, we take care of each other!

In short, we ask the team to:

  1. Identify how much iBZRX each wallet has lost on BSC/Poly staking contract, and convert that to BZRX (on poly it’s around 1:1,007 and on BSC it’s 1:1,03).
  2. Identify how much P/BGOV still needs to be converted
  3. Transfer the corresponding amounts to the respective chain and deposit them in a new smartcontract.
  4. Have the users collect it (or swap P/BGOV) individually (with a warning to make sure they have revoked their permissions correctly before reclaiming their bzrx).

So, let’s go help our brothers and sisters!

Edit: I’ve updated group 1 with affected bzrx, pgov and bgov holders on BSC/Poly, because they are also part of the DAO.

Maybe this subgroup can fill in their details in a form to claim the compensation, that might be easier to process.

And other groups, please don’t despair! Our intention is to compensate everybody in due time, as you can see, we are working on it!

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#2

I can agree to this, and should I get my bzrx back in full I would also use it to vote the other groups to all be fully compensated too.

Id like to think even if we cant achieve it all at once, we will do our damndest to replace all losses for all groups.

Personally im in this project for the long haul, and doing right by all parties will go a long way to recovering from this incident and pave the way for a bright trustworthy future for the project. :slight_smile:

3 Likes
#3

Compensating loyal tokenholders first i do agree with this for a numerous amount of reasons like Audax already pointed out. Its a noble gesture from the team, not to accept any compensation.

#4

personally I think all should be compensated, even if the team are compensated last and in some kind of payment plan, but i agree, it is noble of them to not want it replacing…

Lets right all the wrongs, across the board as best we can and move onwards and upwards

2 Likes
#5

All wrongs, exactly, the teams lifetime of work in the project, they need to be compensated too. We need to tweak the proposal but i understand this proposal is about taking care of the first group.

#6

I also like this idea of Drypto, we can burn vBZRX and release them as Ooki and use that for the other groups, and I would like to compensate the team as well when all is settled and done, it sounds like a great incentive for the team to get this thing settled!

#7

Some great points by Audax here which I completely agree with (see below - there are actually 4 groups and PGOV/BGOV holders should be treated same as Audax’s Group 1 - iBZRX stakers).

I want to add a few more preliminary points (I may have some more after thinking more):

  1. There are actually 4 groups - there are still about 20% of PGOV/BGOV holders who have not swapped to BZRX, but the BZRX bridged to those chains for the swap has now been taken. They should be treated like other iBZRX stakers on Polygon/BSC even though they are staking BGOV/PGOV and not BZRX. The total budget of BZRX to buyout PGOV and BGOV was about 22m BZRX and most of this has been swapped. By my calculations only about 4.5m BZRX worth of PGOV and BGOV has not yet been swapped and will be this Group 4.

  2. We still don’t have full details of what has been taken yet. Remember that until we get final details from the detail and final calculations are done, we cannot have any final figures. We can do some calculations and make some assumptions but they may change.

  3. I think we all want everyone to be compensated in full, but we need to be clear that compromises need to be made. The treasury is quite large as Audax pointed out, but if we sell all that in one go for ETH or USDC, it will tank the price so much we won’t get even 1/10th of what the market price is today.

For what Audax calls Group 2 and Group 3, we will need to consider other points. There can be a separate topic to discuss that, but for example:

  1. They will probably need to be given vBZRX and wait for it to vest into BZRX or OOKI before selling (they can try selling vBZRX directly but there is no liquidity).

  2. Alternatively, they can be given BZRX/OOKI which is much more liquid, but perhaps in a staggered fashion - like 1/3 now, 1/3 after 3 months, 1/3 after 6 months etc. This has the benefit of preventing immediate dumping of huge amounts of BZRX and spreads it out over time, plus it makes it more affordable because the DAO treasury will get more time for BZRX to vest from the huge amount of vBZRX it holds (currently I think about 7m BZRX per month is vesting into the DAO treasury).

  3. I know lots of people who have lost stablecoins and ETH and other non-BZRX tokens want to be repaid in the coins they lost, but this is simply not possible. I would love to do it and I think it would the best outcome, but the DAO literally cannot afford to do this. But there is nothing stopping anyone who receives the compensation from selling into ETH or USDC immediately.

  4. With regards to Group 3, there will need to be some kind of cutoff time. The DAO cannot be responsible for all losses from their wallets forever - perhaps consider something like covering losses for 48 hours after the attack became public (around 12 noon UTC on Friday 5 Nov).

  5. EDIT ADDED: Saw Audax’s post about Drypto’s idea. That makes a lot of sense to burn vBZRX and give liquid OOKI instead, but it will still need to be on some kind of staggered schedule to prevent a mass dumping event. Maybe like the 1/3 every 3 months plan. But it gives us a lot more flexibility than waiting till 2024 for vBZRX to fully vest.

There are more points to consider but these will do for now.

4 Likes
#8

Haha this thread was supposed to be for group 1 (and maybe we can add PGOV/BGOV and BZRX wallet holders in here as well), but now you’ve messed up this thread!

So please take your wisdom and very good points to another thread after we are done here, thanks :stuck_out_tongue:

1 Like
#9

i agree with this strategy. it is not ideal, but the dao cant compensate all groups at one. if there is a structure in compensation, like this proposal, im convinced the dao can afford it to compensate all.

my keypoints:

  • im agree we need to fully compensate group 1 first. giving them the bzrx (or ooki)
  • the ones that lost bzrx in group 3 should be in group 1, because its relative easy to compensate.
  • the other 2 groups need also be fully compensated. this can be after group 1 and there should be another proposal being made how to compensate them.
  • funds recovering can flow back in the treasury.
  • sending vbzrx to a burning adress and get ooki for it is also possible for group 2 and 3
  • after everything is settled, we can discuss how want to get the dev being compensated (or not) ill leave this an open discussion, but im in favour to compensate some to give them strenght en believe how strong we are together!
1 Like
#10

Agree on that. I actually haven’t lost much, cuz most of my bzrx are on eth mainnet so I willing to give my payback to others who lost most. Peace

1 Like
#11

Thanks for this work. As a very casu in crypto, I’m here from the beginning but only as a bzrx staker/holder. Of course I will never dump my tokens at this point and I pretty sure a lot of people of the community won’t too! Thanks again Audax

2 Likes
#12

IMHO

  1. We need DAO back operational ASAP. BZRX, PGOV, BGOV holders and (iholders) should be compensated first to get DAO back in full strength.
  2. Tokens that are in possession of a hacker should not receive any voting power, so perhaps we would need some technical migration first.
  3. OOKI migration should be processed form that technical token after resolution of a crisis.
1 Like
#13

What is this discussion about? I thought that there is enough security fund in the back to cover ALL the users losses? Dont spare them in groups, every group deserves the same 100% refund. It would be a damned joke if one group is worth less than the other ffs. I can not stand this nonsense, fuck loyal tokenholders, fuck drained wallet users. Reimburse everybody, anything else would be fraud

6 Likes
#14

Good points guys, I’ve updated the message with some of your input (see the editted part).

#15

I agree with RektUser. The biggest hit group, both in scale and depth, shouldn’t be pushed aside so nonchalantly. I don’t think the backlash would be worth it. Even if group 1 are a bunch of ‘brothers and sisters’, you’ll have pissed off hundreds if not thousands of other people who will do everything in their power to hurt the project - legally and with smeer campaigns, etc… a lot of unhappy people on telegram… the twitter account has had its biggest single increase in followers fro this incident - I know they say no press is bad press, but I can’t see these being very good.

4 Likes
#16

Furthermore, the repayment of some assets, such as BTC or ETH, after months of a bull market… how much will that cost to pay out? Wouldn’t it cost less to do it sooner?

3 Likes
#17

What do you suggest as a concrete alternative? This is a sincere question. If you have a specific proposal or amendment to Audax’s proposal we’d love to hear it.

I totally agree that ideally everyone would be compensated 100%. But I cannot see how the DAO can pay everyone back in full at the same time - that’s why we are trying to come up with a compromise.

We need to wait for the final figures, but I think roughly $20-25 million in non-BZRX assets (ETH and stablecoins was taken). Plus of course a lot of BZRX.

The DAO Treasury currently has about 44m BZRX (around $15m or a bit more at current prices but of course can’t be sold all at once or the price will tank hard and it will be worth $1 million or something if it is all dumped on the market) plus about 350m vBZRX which is highly illiquid but vests into BZRX at about 7m BZRX per month.

What would you suggest to compensate everyone fairly?

#18

Actually the team’s treasury has enough funds to cover the loss of $55M if we take out 25% from the developer’s loss, it is around $41.25M.

The assets that are available are below:

  1. VBZRX $42.7M (@.12)
  2. BZRX $16.46M (@0.3739)
  3. Others (matic/usdt frozen/3crv) ~$0.6M

If you’re going to propose seniority of claims, then I propose that the following groups get the following tokens

  1. I propose that these group gets VBZRX entirely and have their notional bzrx tokens pbgov and what not at a 1:3 ratio. The existing vbzrx is enough to cover this loss

2/3 Should be grouped together and claim seniority to the 600k (others), and BZRX, then get the remaining as vbzrx

1 Like
#19

Since the token migration is comming soon would like to take a propose it to done sooner
And the snap shot includes the money stolen from dev wallet and others the bZrx and native tokens ( which got stolen by hacker) be allocated to dev wallet or contract before the hack while rest of the token be migrated to those who it ( snapshot with a small change ) and since the treasury has 43M bZrx and team will get 22M bZrx ( after migration) this be used to compensate the users( traders ) and maybe I propose to make the new token migration be kept 1:9.95 or something lower ( not exactly the number need a more calculation) and the remaining ooki token be used for compensation.
While compensating the team hopefully take a loan against these bZR token and give stables or others for those who lost it in so . Or trust me they will dump it so it might take some hard work to take loan , but the collateral compensation be made in stables or eth or some coin and the gains can be considered vested coins or however they decide

Basically what I’m telling is to create a new token migration and allocate it so the hack never happened ( ETC-ETH ) and allocate the stolen fund in bZrx to the people in new token so the 1 st category is solved and their money is reclaimed
The treasury and team ( who lost 22M and got it back with new token) should use it to compensate 2&3 category in non- natives
Would’ve liked my trade to be intact there to close with all the gains but the world isn’t idle so collateral comes first in non natives and would like to consider the gains( profit ) be given as vested in natives

1 Like
#20

Division to groups is total nonsense. We all suffered from this hack and should be refunded equally at once. Division to groups is discrimination and won’t get the project to any good in the future. A lot of people were stakers for the project in the past and it’s not their fault that dev lost the key and contract has been hacked. Only one point i agree with, is that the team should be refunded last.

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