Tribe DAO Votes to Repay Rari Capital Hack Victims—Again

Although it’s been a long road for victims of the Rari Capital hack, it appears as if their journey is once again at its end. 

Following several rounds of voting and governance proposals, Tribe DAO—the entity spawned from a token merger between Rari Capital and Fei Protocol—today confirmed that it would repay victims of the Rari hack. 

The proposal is just one move following the DAO's announced dissolution. Other components of the dissolution included redeeming FEI for DAI, offering TRIBE token holders pro-rata shares of the DAO's assets, and removing all of Tribe's governance powers.

According to on-chain voting platform Tally, where the vote was conducted, 99% of votes were in favor of full reimbursement. “If passed, this proposal would issue a payment to those affected by the Fuse Hack corresponding to the full amount stolen by the hacker,” read the poll.

The decision likely evokes a sense of deja vu among affected parties, as the question has been put to a vote more than once.

$80M Rari Capital Hack 'Was The Domino' That Led to DeFi Project Babylon Finance's Demise

Babylon Finance is winding down, distributing the remaining treasury holdings, and its founder is sharing a few lessons about how the DeFi project went belly up.  The Ethereum-based project was an active asset management platform that sourced investment strategies from members of its community to earn yield. If you had an unspotted idea for making a profit in the crypto markets, Babylon had a platform that you could leverage to raise capital and execute that idea.   Though the reasons for its de...

In April 2022, several liquidity pools on Rari Capital, a do-it-yourself lending and borrowing protocol, were robbed of $80 million. Individual users and larger DAOs were all affected by the breach. These entities had been earning yield on their deposits in each of these pools when the hack occurred.

Individual users will now be paid back in FEI, an algorithmic stablecoin, while DAOs will be paid in DAI, Maker DAO’s popular stablecoin.

The forum discussion outlining which users and DAOs would be refunded included Babylon Finance, Olympus, Fuji DAO. 

Babylon Finance recently shuttered its operations, citing—among other reasons—losses suffered from the hack. 

Tribe DAO’s governance debacle

Importantly, today’s vote was the fourth on whether to make users whole or not, raising criticism from throughout the industry. 

In May, following the hack, the community had voted overwhelmingly to use Tribe DAO’s treasury to pay back affected victims. A second vote roughly a month later then vetoed this decision with Jack Longarzo, another member of Rari and Tribe DAO, arguing that the original May vote was unclear “about how the repayment would be implemented.” 

Then, a week after the veto, the community voted again on whether to repay the victims. The answer was a resounding no.

 Decrypting DeFi

How a Tribe DAO Revote Shows the Flaws in DAO Governance

Decrypting DeFi is Decrypt's DeFi email newsletter. (art: Grant Kempster) Back in April, a lending and borrowing protocol called Rari was hacked for approximately $80 million across seven different pools. Called Fuse pools, they basically let anyone create a lending market for any asset and “spin up their own Compound,” according to Jai Bhavani, Rari’s former CEO. Compound Finance was one of the very first lending and borrowing markets in crypto. It was a novel idea, but quite clearly full of ri...

Today's question was settled via an on chain vote with no veto capabilities, with funds set to be trustlessly distributed in about 17 hours.

Critics of the initial vote said that the governance confusion came from a lack of clear disaster preparedness policies and plans in place prior to the initial hack. It is unclear whether these or other concerns were resolved before the latest vote.