Should Gnosis Help Reimburse Some of The Lost Funds on Agave

Governance
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I am in favour of a compensation plan, and Gnosis helping in that effort. This plan makes sense to me.

In my opinion, there are three main points.

  1. AGVE successfully filled a hole in the Gnosis (formerly xDai) ecosystem. I fully believe that Gnosis should back our native projects, and AGVE has earned our support.

  2. From AGVE’s perspective, it’s hard to blame them for their exploit. This isn’t an exploit due to negligence on AGVE’s part, its due to extremely trusted code by our entire ecosystem that nearly every contract has integrated with having a vulnerability. The audits on this code put the risk at “Low”, and had the contracts patched. Even as a dev in this space, I knew of these audits and it was my understanding that this was “fixed”. I did not realized only newly minted tokens across the bridge were fixed, and old ones retained the exploit. To me, I put the blame on the bridge for not forcing these old contracts to be fixed via a burn migration. It feels like they brushed the problem under the rug and pretended it didn’t exist.

  3. GnosisDAO acquired the ecosystem, and in doing so inherited this responsibility. It’s unfortunate on Gnosis’ part, but if you acquire an ecosystem, you must take responsibility for problems your predecessors left you.

I don’t believe it’s morally okay to leave our OG users hanging, nor blame Agave. Sharing this burden is the best way for us to proceed imo, as well as either fixing the underlying issue or making it very clear in the docs that this issue exists for future teams.

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Agave is the first money market on XDai and almost exclusively used by early adopters of the project. The loss of money happened due to bad design on chain’s part. It’s outrageous that this is even being discussed. Gnosis has a big chunk of reserve right for days like this. Pay it up in each token before market goes higher and dont reflect this on Agave which is running AAVE code that is universally well trusted. It’s not like Agave was allowing deposits and loans for small time farm reward tokens, all the tokens on Agave were bluechip. If AAVE code doesn’t work on your chain with bluechips, and people lose money, you better pay them back or no one else will ever touch this chain.

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Did you try to make a joke there? So if Agave goes copy c copy v the codes of AAVE and bring it to Gnosis chain with slightly modificating it and Agave gets drained by a leak, where users loose their values than you say something like ‘oh it’s the chain fault!’:

We can see a lot of the forks have issues on every chain. That’s why usually people avoid using forks, and only play with money that you can afford easily to loose when it comes to forks. Would be important to pay for the real trusted protocols to develop on the chain, for example Aave. Instead of bringing Agave back to life with Gnosis’ treasury, bring Aave to Gnosis chain. (Aave wants to be on most of the big chains anyways, and we aim to be one of it I suppose as Aave is one of the biggest and most reliabile protocols [wonder why there are so many forks?]). Aave cannot be compared with agave, as people can feel a lot more secure about it, would been using it on a lot higher volume. I feel empathy towards the people who lost value through the incident, but I believe those people now experienced what many of us did through these years exploring the crypto-space and I hope they did learn from it and booked it as a valueable lesson/experience to grow further with their knowledge.
I understand the reasonings on why people try to pressure this incident on the Gnosis chain, but usually these security issues are checked and avoided when people write their own codes like Aave does.
Obviously that’s a level we can’t compare with Agave, as it is a copyc copyv fork, but if Gnosis takes responsibility over Agave (which cannot pay anyways nor as I read the comments the devs there taking responsibilities due it’s a ‘community effort’ and they did copyccopv AAVE nicely), than how many of the future copyc-copyv forks will demand GnosisDAO taking responsibility instead of the people involved with rushing forks (which people usually aim to build asap to win the race towards market share to bring value to themselves and the token holders as they are the biggest token holders anyways) which ended up having leaks? Why should be GnosisDAO take responsibility over the forks on the Gnosis chain paying the users their lost funds due leakage of the copyc copyv forks?
If we build a house in hurry based on an other great-nice house’s draft/blueprint and it collapses, will we ask GnosisDAO to take responsibilities and pay up the damage so we can rebuild?
Well, I believe in this case, we should say Yes.
Because GnosisDAO wants Gnosis chain to be the canary network for Ethereum.
Which means, back and forth it should been able to create protocols without differences or security issues. This is the only reason why I am supporting to take responsibilities partially over Agave.
With different numbers from the GnosisDAO.
I believe there should a minimal way of refund, GnosisDAO should refund less than

A maximum of 30% I would suggest. And the hold of the withdraw so a couple big address cannot drain the partially recovered Agave treasury before ‘most of the users’ withdraw their smaller portions. This would mean a more fair distribution of partially recovered funds. And it doesn’t create a ‘rat race’ to withdraw asap or you will not get your funds. It would been like in banks in emergency. Make sure the Agave codes will not allow some address to withdraw more than the limit for everyone. Nor would be ‘bugged’ anyhow to abuse withdrawal function to drain the recovered funds with a couple big address.
This would be a decentralized way that favors everyone in the same way who got involved, distributing the partially recovered funds on the weight of GnosisDAO.

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I feel it makes sense to implement

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Gnosis should pay %100 of the lost funds because
1-The positive feedback of such an action reinforces trust that Gnosis Chain takes responsibility for their shortcomings which is evidenced by the decision for a hard fork to be made in this case.

2-The amount that is lost is small when compared to Gnosis’ reserves. It is not like the reserve will be shaken. Still, Gnosis will receive Agave tokens at a markup compared to current price but will achieve large control in Agave and will retain the chance of covering the loss if Agave flourishes again.

3-Agave is a product of 1hive which is the only DAO that kept trying to build things on XDai before even the layer 1 boom. 1hive stood by this chain and almost all OG’s on this chain used it’s products. If this chain fails to bring big names due to the cheapstake act, which is a big possibility as shown by your response, it is highly likely that 1hive will still be the only DAO that continues to build things here. So it’s not a bad choice to support them in an event like this where the chain needs upgrade due to the reentrancy attack.

4-I held Gnosis for a long time before the coup-like agreement that led to it acquiring XDai chain and the problem with Gnosis that lead me out was the close-fisted approach it had about it’s treasury. All layer 1s pumped up via giving incentives to their protocols for high apr and grown a lot while Gnosis always tried to preserve the treasury. This approach led to Gnosis failing on it’s own and acquiring another chain. If this type of behaviour is to be followed, I’m sure the last dwindling XDai users will flee as well.

5-Good luck with bringing AAVE here with zero liquidity onchain and not helping your main money market users who got robbed due to negligence on chain’s part keeping your bridge with outdated cote which is a risk factor.

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Understandable points, but can’t agree with the

part, but I believe Gnosis should take partially stand to recover a chunk of the funds.
I would not vote yes if the proposal would suggest recovering more than 30% by GnosisDAO except:
The only case I would support 100% recovery by GnosisDAO if it’s locked and distributed overtime in 6 months for example. While there will be motives & action taken towards tracing back the exploiter by a team of professionals paid by GnosisDAO. And still it would been ideal (most likely it’s late) to offer a bounty for showing the way of the exploit, for example 25% of all the stolen funds and no legal charges will apply. Would be nice to discuss these further live!

Let’s have a GnosisDAO core team AMA with questions & answers live on Twitter or Discord so we can discuss all of this properly and hear the core team’s opinions on the incident! 1 hour would be enough with also including further questions about different things (as even about the SAFE token there are questions which don’t get answers yet nor on telegram nor on discord)

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@Nikko Ser, obviously you are not informed about the history of this chain and its community. I would like to share some info, which I believe may help you change your opinion regarding a reimbursement. However, first of all, I should definitely emphasize that no one would try to impose full responsibility of the exploit over Gnosis here, and that is why people have been trying to find a common ground, which in the end will be beneficial for all parties. Alright, let’s get to the history.
1 - One of the reasons why 1Hive decided to deploy its tools on xDai was that the community experiments with decentralized governance tools. And these tools require direct on-chain actions, which is simply not feasible on Mainnet.
2 - 1Hive have been working on xDai chain since 2020, experimenting with stuff, and bootstrapping the chain, onboarding new contributors, and attempting to bring necessary tools that all EVM chains should have. For instance, when 1Hive first migrated to xDai, there was not a DEX. Hence born Honeyswap, forking Uniswap to fill the lack of a DEX in the ecosystem.
3 - Agave, again, was born out of 1Hive due to a necessity. The idea first emerged in January 2021 as you can see here . When it was first discussed, Aave was not deployed on any chain other than Mainnet, leaving people with smaller portfolios outside a simple DeFi experience. Therefore, as we believed it is one of the most robust codebases out there for a lending/borrowing platform, we decided to fork Aave into Agave because Aave was obviously not interested in deploying their platform on xDai.
4 - Agave is not some simple copy-pasta fork where you keep seeing popping up everyday for some easy cash-grab or outright rugpulls like those GooseDefi forks or Tomb or whatever the hell forks. The idea to fork Aave was both out of respect for the code and to fill again a necessary void in order to enhance the DeFi structure on xDai chain.
5 - While experimenting with this stuff, neither 1Hive nor Agave did any IDO-like token sale, and these were community projects since the beginning. Moreover, again neither 1Hive nor Agave had received any funding from the Ecosystem Fund before the matching reward system here proposed again by @Monstrosity on the xDai/Stake forum. In fact, 1Hive has spent more than $3M from its limited common pool mostly to bootstrap the entire chain as can be seen here.
6 - People who got rekt due to the exploit are mainly community members of this small ecosystem (or hipsters as Igor Barinov liked to put it :smiley: ), including myself and many of my frens who have been working to make this entire chain better, to grow it by either building stuff or helping others getting onboarded.
7 - People who lost funds due to the exploit believed that both the code and the infrastructure where the code resides were robust, and did not want to put their money outside this ecosystem as it would be simply ridiculous to do while trying to increase the TVL of your own chain.
8 - Lastly, to re-emphasize, this proposal is not a simple bail-out of Agave by Gnosis DAO, but a good faith approach by all the parties, sharing the burden based on their capability. And please bear in mind, the tone of the argument can be hurtful for people as it is individual users, the core of this community, who lost considerable amount of their funds (I, myself, lost my life savings).
9 - You are free to tell me “fuck off, I don’t care about your losses, all I care is my bags,” and it would show what a wonderful personality you have!

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I see you are making great points there, and understandable. I am aware of 1hive’s work and I liked to use honeyswap (which I am bit disappointed nowadays as I thought it would been a very-multichain dex by now), but also there is two sides of the coins to be more fair and I didn’t forget some of the negative talks that popped up in ‘hard times’ about ‘how good it would been if they would been picking matic instead of xdai’ Which is understandable as matic got a lot of attention, other chains and ecosystems did envy that growth rate.
I am not trying to bring Agave down as a cash-grab-dump fork nor 1hive’s work down as 1hive does some legit-well done projects, there is place for forks obviously and they are more than welcomed. But as you saw me writing it above: a brand like Aave, is simply bringing trust, volume. I didn’t say that it would be 100% secure and cannot be exploited, as that only the time can tell. But I believe, it is more secure as those who wrote the protocol are more aware of details (which still it doesn’t mean it can’t be exploit), as I see, it is more trusted, plus brings awareness-liquidity.
Out of forks 1hive did a truly nice job to fill the leaks-the lacks of protocols on the chain. I am a simple individual, who favours to use the first and ‘brand protocols’ which other people make forks of, based on my experiences from the past, like this exploit now with Agave for example. As I learned through the hard way, that forks usually-a lot more times- giving hard times to users by incidents which impacts user experience, usually by an exploit. Which just did happen now. (In this case understandable Gnosis has the place of it in the incident)
These experiences are painful but users can learn from them as it leaves a very valueable lesson which is hard task to digest, but also the basic old principle which aged thousands of years: ‘Never keep all your eggs in one basket’ would be a good guide in the future, not to risk it all at once. -If I take the “lost my life savings” part as a fact, with a hint of skepticism.

I believe this last part doesn’t fit properly on the forum, also what I wrote above is that I am supporting the idea of GnosisDAO partially helping recovering the stolen funds.
But I also find it interesting that there are lack of conversations on aiming to find out who got away with the funds, and there are way bigger exploits tracked back by professionals.
Or offer the exploiter 30% of the funds as a reward of showing the vulnerabilities. (most likely it’s late?)
Which GnosisDAO could pay as Gnosis chain had responsibility over it. (I believe partially)
Most likely-and obviously there are a lot of people talking with each other privately about what can-could be done by GnosisDAO.
But I find the lack of motives to tracking the exploiter also the lack of bounty offering kinda interesting but straight jumping to the recovering status.
But I am not sure what would be ideal in this case. Maybe recovery first, than paying professionals.
Did GnosisDAO even offer a percentage bounty for the vulnerability shown? If that’s the case, it’s my bad, didn’t see it yet.
The idea of recovering the funds is obviously something I would vote with yes, but percentages I would re-consider with additions.

The best of me says I should stay positive and let go about the idea of some leveraged this situation to their own benefits. Mentioning auction floor prices, buys, are usually have a bad reputation in DAOs due selfish motives.
Which I am sure in this case, is far away from that intention, and none leveraged it via planning it.
I am just throwing ideas in-out so together we could make sure the GnosisDAO’s treasury are not treated the way politicans usually treat our paid tax money but with more care!:slight_smile:

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Discourse not letting me edit the original post. I will reply for now and try to edit the post asap if it’s a permissions issue and I am able to resolve it.

Partnership and Refund Proposal

We intend on hosting an AMA to address any question in a more digestible way.

GnosisDAO acquires 24% to 47% of circulating AGVE:

  • Tokenwap of 12.5K AGVE for GNO at a price of 0.04 ETH. ( 500 ETH swap)
  • Agave auctions 12.5K AGVE to build its treasury and GnosisDAO bids ETH at the 0.04 ETH price, ( 500 ETH commitment ). The purpose of this auction is to allow other interested parties to have the same chance to acquire a larger position in Agave.

Security assurance:

  • Agave gets access to the GnosisDAO’s smart contract auditing pipeline, which will oversee protocol upgrades and external integrations.
  • Agave improves the bug bounty program that was in collaboration with 1hive into a more standard approach in the industry. Scoping both Web and Smart Contract applications with more attractive bounties.

User refunds:

  • GnosisDAO covers the full amount of GNO lost in the hack ~8400 GNO (roughly 50% of lost funds)
  • GnosisDAO loans the remaining amount of lost funds to Agave approx 3.7M USDC (as of today).
  • Agave to cover 80% of all funds lost across all assets and the remaining 20% in GNO, WXDAI, USDC, LINK, WETH and WBTC, will be repaid via revenues from protocol fees in the asset lost, in biannual instalments over 2 years (4 instalments).

  • The acquisition of the funds will be delegated to Kapartkey to execute this in the cheapest and most sensible manner possible. An updated exact amount of the amount loaned in USDC will be updated after these asset acquisitions.

Future GnosisDAO partnership with Agave on Gnosis Chain:

  • Liquidity Provision: Use of GnosisDAO treasury funds to increase Agave protocol TVL.
  • AGVE token buybacks: Treasury does AGVE buybacks in the open market to target attractive and subsidised borrowing rates on Agave.
  • Continuation of GNO incentives program on Agave
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TLDR: I conditionally support the compensation piece - dependent on satisfactory loan details - but I do not support the investment piece as it currently is.

This $10m+ proposal is significantly lacking in detail for GnosisDAO members to make an informed decision, an absolutely must for good governance.

The total cost & maximum exposure for this proposal (in $ current market prices) is $10.8m (excluding the extras in the last ‘Future…’ chunk which can not be priced as they have no details). This is over 4x the current market cap of Agave.

  • $3.6m is for direct compensation to lenders who lost money
  • $3.7m is a loan (with no details provided) to help Agave compensate lenders who lost money
  • $1.7m to $3.5m is for an investment of 24% to 47% (circulating supply) purchased for a roughly 46% premium on current market price

We all have to ask ourselves if this significant total $ this proposal asks for is a judicious use of Treasury funds.

THE COMPENSATION PIECE

I like that we are sticking to the roughly 50% direct contribution from GnosisDAO for the compensation.

I am ok with loaning Agave the balance to get to the 80% threshold for compensation. I prefer this to that being covered by the investment piece as in the previous proposal. It makes a cleaner break between the compensation and the investment pieces

However, there really needs to be a high level description of the terms and conditions for this loan. Will any collateral be posted? Is there any guarantors? What is the schedule and conditions for repayment? Under what conditions can we recall the loan? What is the interest rate? What happens under default?

We cannot make an informed decision without knowing the details of this loan.

At current market prices, this piece will cost us $3.6m in GNO and we will be making a loan of $3.7m (it’s not stated the makeup of this loan).

Assuming the loan details are satisfactory, I would support this compensation piece.

THE INVESTMENT PIECE

As a proposal for investment, this piece is significantly lacking in information for GnosisDAO to evaluate the opportunity. What’s our objectives? What’s our rationale? What’s our exit plan? What are the risks? What due diligence has been done or will be done on the team? What’s the timeline for the investment, are there any prerequisites? What are the cyber and op sec protections for these funds & will gnosisDAO be represented on the multi sig? How will we use our significant governance power? How will this investment be used? What reporting will be provided to GnosisDAO on progress towards objectives? What’s Agave’s strategy to become the dominant money market on GC? How will they compete against AAVE if it comes to GC? Do they have a multi chain ambition?

These are all basic questions we’d need answered to make an informed decision.

That aside, I am now less comfortable with this as a straight investment. I’m ok with use taking a small stake (perhaps 10%) to help Agave get back on it’s feet and for us to take on some risk for potential upside, with a plan for Agave to buy it back once they’re stable enough.

However, taking a large stake exposes us to a significant conflict of interest and reduces the attractiveness of the chain to money market competitors. The incentives become skewed; if we are so vested in the success of Agave it is rational for us to tilt the playing field in their favor and against competitors in future decisions.

The first test of this will be the refined proposal for Hundred finance. If we don’t offer a roughly comparative investment proposal, this bias will already have been demonstrated.

This makes Agave very centralised. We basically control the protocol if we take the full amount available (which seems likely).

Yes, we want to have thriving and secure money markets protocol on GC, but no we don’t want a pseudo nationalised approach that squashes competition and makes small AGVE holders irrelevant in governance.

At current market prices, this piece will involve an investment of between $1.7m and $3.5m.

The price premium (in eth) we would be paying over market price at approx 46% is also too high for me. This has gone up since the first proposal (unless I have done my sums wrong, please correct me if so).

I currently do not support this piece.

GOOD GOVERNANCE

From a good governance view, this should be 2 separate proposals. One for compensation to lenders and one for the investment in Agave.

I see logistically it is easier & quicker to put into one but there are 2 distinct objectives and stakeholders that are targeted, and by wrapping them into one proposal, you don’t allow GnosisDAO members to hold different views on the compensation for lenders who lost money vs the investment into Agave. I would be forced to vote NO on this proposal as it is despite supporting compensation.

I’m not sure what the “Future GnosisDAO partnership…” section is for? By passing this proposal are we giving uncapped carte blanche to spend on these items? Will these be put to future vote? The AGVE token buybacks looks particularly concerning. With such little detail we cannot have an informed opinion on here.

In a proposal like this you need to be very clear on what is being proposed and voted on, what is provided for extra information and potential future options and what is not in scope.

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You are simply viewing things from an investment point of view. More favor towards Agave rather than Hundred Finance is actually very easy to justify as Hundred boarded on after GNO acquired XDai whereas Agave, the first money market and Honeyswap, the first dex were built by 1hive. 1hive is respected and supported by a vast margin of original XDai users and early adopters who form the basis of XDai chain. I’m sure most users of Agave actually have a lot of investments in other protocols on Gnosis chain and hold a significant percentage of the chain’s TVL. These people are not rent-seekers but good actors who put the chain on the map.

I believe some people on this forum forget the fact that Gnosis is the Xdai chain right now. There are original users, early adopters, builders and devs on this chain who were here before the purchase and it seems to me like some GNO holders are having a hard time adopting the fact that this is the Gnosis Chain now and it is not a zeroday chain. The reason Gnosis bought it’s way in is because it wanted to adopt this small tvl chain that has a lot of experienced users and tight community.

Monstrosity’s offer is reasonable but do not view it as an investment offer, it is most definitely a partial compensation offer that would allow Gnosis spend a small amount of it’s treasury to help the biggest community on this chain revive, rethrive all the while retaining the opportunity for Gnosis treasury to recoup the compensation expenditure.

Remember that this chain is not an asset on Gnosis’ portfolio but it’s own chain now. Gnosis is not a hedge fund. treasuries are formed to support and reinforce the users. I believe it would be best for Gnosis to acknowledge the bridge tokens’ recall function issue, refund all the users according to Monstrosity’s plan and then use some more of their treasuries to pay news outlets to make news that Gnosis reimbursed the losses due to the hacks and stands firm by it’s users.

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By definition, this is an investment. Agave had no real financial losses, there is nothing to compensate the protocol for and they share responsibility for the exploit anyway. The losses were borne by the lenders, who we are partially compensating.

You’re very focused on the past and justifying this investment through sentiment. I’m focused on the future and wanting to make sure our Treasury funds will be put to good use to achieve GC strategic objectives.

Only in crypto would there be an ask for millions of dollars investment with literally zero effort made to justify or explain it. There is a case for this investment, but it has to be spelled out in this proposal so we can evaluate it.

I see it quite simply:

  • GnosisDAO is obliged to provide compensation to lenders who lost money. Roughly 50% is fair given the exploit.

GnosisDAO should show good will to Agave by:

  • being open to lending to Agave to help them further compensate the lenders who lost money
  • being open to invest to help Agave get back on its feet

But for both of these need to be evaluated and structured professionally, not based on wooly sentiment. If we don’t understand what the objectives for this investment are and why we’re doing it, we’re just recklessly gambling with the Treasury. We are in an hyper competitive race with other EVM chains, we can’t afford to be so cavalier.

Some questions we GnosisDAO members should be asking ourselves as we evaluate the investment piece of this proposal (all of which should be addressed in the proposal):

  • If we thought a centrally backed Gnosis only money market was important for GC, why didn’t we invest before? What’s changed? Why should an exploit change our thinking?
  • What return of investment can we expect? Not necessarily quantitatively in $, but qualitatively in making the chain better? Are we getting a good deal? How else could we better deploy these resources?
  • Why is investing in Agave better than using the resources to attract protocols from mainnet who are multi chain, like Aave? Or tempt ethereum only protocols to make GC their first foray outside mainnet, like Rari or Compound. If our vision is to be a shadow chain for ethereum, doesn’t it make more sense to attract these protocols? Who will attract more TVL onto the chain?
  • You say “treasuries are formed to support and reinforce the users”. Why is a gnosis only money market better for Gnosis users than attracting established lending protocols from ethereum? Better rates? More long tail assets? More secure? More capitally efficient? Better liquidation engine? Better oracles? More innovative features? Better risk management? Bigger treasury & market cap to support compensation?
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I agree that explicit terms of the loan and investment should be made, but I do agree with sisedieltan.

Only in crypto would there be an ask for millions of dollars investment with literally zero effort made to justify or explain it.

First of all, crypto != corporations. Corporations are legal people, controlled by a board of other people whose entire goal is to make profit, where it’s illegal for an executive director to take actions that can’t be justified as “making the shareholders money”, hence why traditional finance needs the extra work in their proposals. Things have to be court ready and prove beyond a reasonable doubt that it brings profit to shareholders. Whereas DAOs are communities whose goals are totally up to the individuals that make up the community, with no executive director. The desires of the DAO are the sum desires of the voting community, and those goals don’t need to be strictly for-profit or court ready decisions.

Users of the agave community just needs to convince users of the Gnosis community to vote yes, and users of Gnosis need to be convinced to vote yes. It’s more streamlined, and also more chaotic. That’s the nature of the differences between DAOs vs corporations.

Onto the proposal, I am a fan.

For Gnosis, they can acquire a large stake in a DeFi app that is loyal to the network they just acquired, while righting the wrongs of the bridge they acquired. They can gain a lot of faith in the xDai community, proving they have our backs. They can solidify that there wasn’t a hostile takeover, and that they will support us beyond what Polygon or Binance would do for us. They can do all that, while also acquiring a large stake in what I consider to be the main DeFi app of our network. Gnosis Chain’s success means Agaves success, and that in turn can create serious gains in their treasury if Gnosis executes this properly. This access to Agave also gives them a strong say over how they want Agave to move forward, and allows them to ensure a mistake like this will never happen again.

For Agave, this makes a lot of sense too. They can get access to Gnosis’ audits, and prove an accident like this will not happen again. They can expand their growth, with the support of Gnosis, effectively solidifying themselves as the DeFi protocol of choice on this chain moving into the foreseeable future. It is sad for them that resolving this issue means losing so much of their treasury, it will definitely hurt their ability to fund future development and projects. However, doing right by these wrongs is worth it, and could only happen in crypto. The ability for the people behind a DAO to shine through, rather than the profiteering of a corporation to guide these decisions, is a beautiful thing.

All in all, as a long term Gnosis Chain (xDai) user, I support this proposal. I would be interested in hearing more details, but as a whole I do believe this would be the best decision for GnosisDAO, Agave and all the users affected.

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You are saying there are better alternatives to Agave and better investment opportunities.

1- Treasury is not an investment pool. It is a community driven treasury to intervene in situations like this and incentivize the adoption of chain.

2- If you check balances that lost money, they have a lot of stake in other protocols. These people would most likely move elsewhere and put further stress on the thin liquidity. Which would in turn cause even more slippage to low-mid stack users who would bring their assets to Gnosis Chain via bridges. I wouldn’t expect Aave to enter Gnosis Chain with it’s current low liquidity, and leaving the 1hive community alone after this exploit which the bridge has also some blame would be a bad look, especially after the takeover of the chain by Gnosis which was seen aggresive by most.

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You’ve gone off on a tangent about Corporations and DAOs, my focus was on good, informed decision making. I assume we can agree whether Corporation, University, not-for-profit or DAO, a desirable goal of governance is to make good, informed decisions?

My point is simple: we can’t make a good, informed decision here on this investment opportunity because no information has been provided. Agave have made zero effort to inform or persuade us why we should do this. I am open to persuasion that this is a good idea but they have to do some work to show they have a plan for this money and why that will benefit GC. For DAOs, a strong proposal is arguably more important than traditional domains, because that’s often all we have to make our decision and we’re dealing with anonymous people.

If this passes as-is, this will have been an abject failure of DAO governance, by any standard.

Again, my main issue here is that this proposal is not fit for purpose for good, informed decision making, not that an investment in Agave is necessarily a bad idea (although I have concerns about the size of the position, as I raised before).

I propose that Agave split the investment piece into a separate proposal, review other proposals both here and on more mature DAOs (e.g. Maker, Aave) so they can see what a good proposal looks like, and then resubmit with the information we need to make a good, informed decision.

In future we really should enforce a minimum standard for proposals, as many DAOs do.

By the way, your understand of shareholder primacy is simplistic and not how it works in the real world, where in practice we are somewhere between shareholder and stakeholder primacy, jurisdiction depending. If it is law or just a norm is contested. Many regulations undermine shareholder primacy, for example, the emerging body of ESG regs, and there has been friction with CSR for decades. Beyond reasonable doubt is a criminal standard, shareholder primacy is a civil matter.

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You are saying there are better alternatives to Agave and better investment opportunities.

No, I’m not. I can’t make that determination because I don’t know what this investment opportunity is. They could spend the money on hookers and blow and we couldn’t have an issue with that. This proposal as-is gives them carte blanche to do whatever they want, we are basically entirely reliant on trust that they will do the right thing by GC. I come from a school of trust but verify.

Do you know why they’re raising $3.4m? Why not $500k? Or $5m or $10m? Your arguments haven’t mentioned the amount, would you support any amount they asked for without knowing what they’re going to do with it?

1- Treasury is not an investment pool. It is a community driven treasury to intervene in situations like this and incentivize the adoption of chain.

How does this incentivize adoption of the chain? Why is this proposal better at incentivizing adoption of the chain than focusing on luring mainnet protocols? Or better than running a hackathon with $3m prizes for funding several new money market protocols?

It’s not about whether it’s an investment pool or not, it’s about whether we’re diligent and judicious with how we use the Treasury or we just wing it and throw some money at a protocol because they’ve asked for it and hope for the best.

You seem to keep arguing as if I wasn’t supporting compensation, which I am.

Also I see you haven’t addressed my points about what is good for GC users. Why is Agave better for GC users than, say, Aave v3, which offers several upgrades in user experience and risk management? Particularly if we want to attract more users and TVL, then portals would reduce friction for users to make the switch.

32

Before AGAVE was hacked, there wasn’a a discussion to invite AAVE. It’s another discussion and this is note a vote to choose which one to fund. So if you want to do anything with AAVE, then you should have opened up a discussion about that on the forum and not spam here with the same comparison over and over again.

If the vote won’t pass, a substantial percentage of the TVL that is already on GC will leave, this will make it harder and harder for luring big name protocols and will cause more of the TVL to leave due to slippage. Not to mention the only native builder 1Hive will most likely close shop and leave.

33

I can see you point, and as one who have waited a long time for a lending market like agave to come to the ecosystem once called xDAI-chain, I have the trust they will use the funds in a way that will improve the whole ecosystem. That’s why my former $Stake that are $Gno now will vote for whatever helps them most.

34

As one of the users that lost funds I think the proposal has become a bit too complex. I would prefer a simple compensation. Gnosis compensate with e.g. 100% of lost funds and Agave give some AGVE in return. Done!

Also, the I see the compensation as also being an investment in terms of happy users. The compensation will likely end up in the TVL of the chain once again since happy users will reinvest funds (I would). Unhappy users, on the other hand, will maybe look for happier places?

Another simple idea is also to just compensate all users directly with GNO according to for example the USD value the day of the theft (lent minus borrowed). This makes it easy to restart contracts with empty state.

35

I agree that simple solutions are better than complex ones, but I doubt that the majority of users will be happy with a refund in GNO equivalent to the daily rate, especially since a lot of GNO was lost and the GNO Price has increased significantly since then.

However, I also see that with a good solution the majority of the reimbursed capital (and users, which are far more compared to 100finance) will remain on the GC, whatever the solution will ultimately be.

But in the end this will not be decided alone here in the forum but by Agave in cooperation with Gnosis DAO. I hope for the best.