====Problem of current plan
The recent incident was caused by an absurd mistake due to an individual’s mishandling of private key management. There are numerous system safeguards, such as multisig and timelocks, that could have adequately prevented this, but none were implemented.
The Alex team should take responsibility for this. To express their responsibility, transparently disclose the team’s assets, and allocate a significant portion of them to compensate users.
====Team’s asset
The team raised ~ $18M in past funding rounds. Also, they had sufficient amount of assets in their own wallet. Their STX tokens were drained as well, but other assets are all recovered and safe.
This is ALEX team’s own wallet (unrelated to users’ assets) SP22PCWZ9EJMHV4PHVS0C8H3B3E4Q079ZHY6CXDS1. At the moment of the incident, it had
13.8 xBTC (transferred out tx 0x54e5b14d219bf5d87726079da38a7c2ad69027fa733d4c28f223620ebfdabf66)
1.09 aBTC (transferred out tx 0x1cd10f9a59902171a87423628ab3f8095bba9ee95bfda60166970907a496c9b7)
68.2K sUSDT (transferred out tx 0x266266cc4e07cb918755826f9e9ac09a60a969b11e5e490954146c0aa5e493e9)
77.1K xUSD (transferred out tx 0x5c7c1b977d4442111d9ed1829082d2d611b26c91d0b54d348af9e415aa49c6c3)
Also, xBTC-aBTC liquidity worth ~8.000 BTC was provided by ALEX team and was fully recovered, so it should be included as well.
In total, they now have AT LEAST 22.89 BTC and 145.3K USD assets, ~ 1.75M assets on chain.
They have many other wallets, but I have no information for now.
====Suggestion
ALEX team should disclose all their asset and allocate a significant portion of it to affected users. To be responsible, the team should share loss as well
Nonsense to me.
If ALEX pays as all as it has. I as an individual ALEX Holder would vote 100000% Disagree on this.
Any proposal should at least consider the sustainability of protocol operation.
If the total loss of around 26M~ STX is fully covered by operation capital, it means the whole protocol would go bankrupt.
Defi protocol is natural with “smart contract” risk or risk in any other forms.
You should be aware of that before the investment.
I am not against any form of compensation above the baseline that the protocol would continue to operate.
This opinion would be valid had the protocol actually got hacked. This happened due to Phishing of teams private keys. Something that was 100% preventable. It’s nonsensical to prioritize the future of the project over the users when the users are the ones that made the project successful. Furthermore, most users were unaware that there was even a backdoor they had access to, assuming the entire thing was ‘decentralized.’ ALEX lab owes the users. It’s as simple as that.
Nothing is entirely risk-free.
As a token investor, the major concern is token value. If the team fails to manage capital effectively, it could impact ALEX’s value. It’s crucial for the team to keep operating to protect token value.
I would say without any funds, the team will be immediately dismissed after compensation.
In which no protocol service would go back to normalize again.
How does the token accrue any value if the team gets dismissal?
Check out “collaboration in crsis” which is the only sensible way to keep the protocol alive long enough to generate enough revenue to fully compensate its users without it being at the total expense of the founders
I agree completely. In addition to all ALEX wallets, all founders & leadership personal wealth (BTC, STX, other non-$ALEX crypto holdings, and fiat) should be included in the restoration.
I don’t understand why they have not already proposed taking full financial responsibility for this completely insane lack of security and disregard for assets that do not belong to them.
ALEX founders & leadership are 100% at fault for this incident and it should have never happened.
Why should the community come up with a plan to save the ALEX founders & leadership from turning over their own personal cryptocurrency to repay the stolen STX?
The conduct of the founders / team members throughout this incident has been appalling. No one stepped forward to own the problem, admit an amateur mistake was made and that users would be made whole. Instead some half assed compensation was drawn up and required tonnes of complaints from users before they bothered to seek community feedback. Look at the attitude of the mods from their discord - you should be utterly ashamed of your behaviour.
Chiente Hsu and Rachel Y - looking at you both. Step up, own the problem, communicate better or GTFO back to your tradfi roles. And for the love of god, stop muting users disagreeing with you and only tweeting comments from fanboys - you are fooling no one with that. Get rid of that person handling your social media.
And yes - team assets should be allocated to users to make us whole. This wasn’t a protocol hack. This was your stupid mistake.
If ALEX does not resolve this ASAP and leaders don’t take fully accountability, ALEX is dead. It won’t survive. Karma is real. Community will leave. Trust is already lost. Sustainability of ALEX should not be the priority because it will die anyhow if Chiente, Rachel, etc. do not speak publicly and present their plan for paying LP providers back 100%.
Operating a single-sig wallet for a main asset vault is unreasonable. Demanding that they disclose their assets to cover the loss is not.
This loss is due to a phishing exploit and the fact that the vault wallet was single-sig?
These risks are covered in Cryptocurrency Security 101.
It is unfathomable that ALEX did not have security in place to protect users assets. No one signed up for this because military grade security is expected by industry.
ALEX leadership is 100% responsible for this loss. That is how they are personally liable for repaying the wallets whose STX was stolen. In what universe are project founders not accountable and responsible for maintaining security through procedures and policies?
The Alex protocol is worth 128 million USD, the loss is only 1 million STX or 2 million USD. So there must be a way to cover all the losses and keep the trust. The trust is much more valuable than this 1m STX.
Think about such a solution as finding an investor for this 1m STX and tell the community that all assets will be recovered as it is.
The current announcement that the LP holder will get ALEX token for the lost STX will just make the ALEX token worthless.
on this.