Fei protocol’s plan to exit the Tribe DAO has created a brand new drama within the DeFi house after the Frax Finance founder alleged that FEI is refusing to refund those that misplaced cash in an early exploit.
Fei Labs, a key member of the DAO, submitted a proposal stating that one of the simplest ways ahead for the Tribe DAO is to present compensation for hack victims, redeem FEI for DAI, and distribute the remaining protocol-controlled worth (PCV) to Tribe holders.
However, not everyone seems to be happy with the proposal. Frax founder Sam Kazemian has criticized the proposal, saying it’s the most “egregious ‘DAO/DeFi’ scenario” he has ever seen.
The criticism is due to part of the proposal that plans to compensate hack victims with 88.9 million unvested TRIBE tokens price $16 million. This is far decrease than the $80 million misplaced within the hack.
The present controversy began when Fei Protocol merged with RariCapital DAO in 2021 to create the Tribe DAO. Later in April 2022, an exploit of the Fei-Fuse cash market led to the lack of $80 million.
At the time, Tribe DAO had a governance vote on whether or not to reimburse the exploit victims. The majority of the DAO voted in help of this. But the reimbursement didn’t occur.
Just a few months later, with the crypto bear market in full swing, FEI submitted one other proposal to do the reimbursement vote once more, saying the final one didn’t rely. This time round, the vote didn’t move.
Now, main backers of the Fei-Fuse, resembling Frax finance, are accusing the Fei Protocol of reneging on the reimbursement. According to Sam Kazemian, the protocol misplaced about $13 million and meant to use the reimbursement to strengthen its FRAX stablecoin peg.
He added that FEI has “sufficient PCV to redeem each stablecoin on the peg, repay each cent to victims, & STILL have ~$65m in worth for $TRIBE holders to redeem & revenue.”
But it’s selecting to go away the most important hack victims with many of the losses as an alternative. The present proposal supplied to pay Frax 2% of its $12.3 million loss, Olympus DAO 3% of the $8.9 million loss, Balancer Labs with 19%, and VesperFi with 27%.
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