letsgetonchain

@permaOx it is based on good will, but has always been the case in the past. over 2 years of track record

@letsgetonchain The protection is assured? I figured it was their good will

for those that have NOT sold the last of their ETH Fluid Lite ETH vault is the best risk adjusted ETH yield I can find: 100 ETH deposited since inception -> 121 ETH today 100 ETH staked with Lido same period -> 111 ETH today - runs a simple leveraged LST strategy across Spark, Aave and Fluid (all platforms run on LST share price not secondary markets, temporary depegs are not a risk for liquidation) - longest track record of any such strategy I could find - has covered any losses that incurred during market volatility that pushed ETH borrow rates above LST yield - Zero days of negative yield since launch (Feb 2023) - 53 days of paused withdrawals out of 1,194 days live

@permaOx yes it does this happens every time ETH borrow rates spike. if i loop myself as a user I would have suffered those. fluit eth lite offers me protection against those. think of it as a junior protection mechanism that takes first loss

@letsgetonchain "Zero days of negative yield since launch" It had negative yield though, it was just covered by the team. Not sure if that's the safest way to go about it.

ETH is unique in so many ways the more i see the tempo's and canton's of this world proliferate in our space the more i am convinced that no chain will ever be able to replicate the properties of Ethereum there will be a time where this gets reflected in pa again

@sshxbt only 0.5% on the basis trade. didnt know the basis had compressed that badly

devs cooked app.ethena.fi/dashboards/bac…

This is great to see from @Lighter_xyz ! I noted this as one major milestone to overcome in this Perp DEX research piece from last year! Give it a read: ➡️x.com/letsgetonchain…

@WildcatFi @wintermute_t @Morpho is there no conflict of interest when wintermute as a curator underwrites its own credit lines as collateral?

A big step for Wildcat's composability across DeFi. @wintermute_t´s Armitage Select vault on @Morpho now lends against v-wmtUSDC: the ERC-4626 wrapper of their Wildcat USDC market token. Wildcat debt is now usable as collateral in secondary lending markets. The composability loop is now live. #overview" target="_blank" rel="nofollow noopener">app.morpho.org/ethereum/vault…

Introducing the Monastery for AI-native founders. A single builder can now outperform a publicly traded company. $2 million. 12 weeks. Do the impossible.

@CryptoCypherNow @koolkrypto223 @jpn_memelord im saying he could have reached out to understand what actually happened. Then one can decide to go public if there is need! I think we can agree the story would have been very different.

That's not really how accountability and a free press work. You cant just privately message companies, assume they'll reply and then take their word for it. If not for his public post much of what happened likely would never have been revealed. If businesses can sweep things under the rug by ignoring concerns they usually will.

The aerodrome cabal is probably the most toxic and net negative force in this space On one side you have efforts like DeFi United, where the whole space rallied to scramble together coverage for Aave's bad debt after the Kelp incident. A collective response to a collective problem. On the other side you have Fluid, which made the honorable decision (with zero obligation to do so) to cover the ~$8m in bad debt that USDC and USDT depositors were exposed to from the Resolv incident. Alone. No external help. Putting users first. And what does aerodrome do? Instead of building anything resembling a useful product beyond their ponzinomics, they spend their time and energy trying to insinuate wrongdoing and cast doubt on Fluid's solvency (knowing very well that for any lending protocol, FUD around solvency is the most dangerous thing). From my read, and that is only what is public and what i can see onchain is that Fluid decided to cover the bad debt with their business treasury. Structurally identical to Aave using its treasury to cover the Kelp hack, with the one difference that Fluid is socering all the bad debt alone. To execute, they replaced the bad debt with an unsecured credit line originally approved for another purpose. This did not worsen the position of any USDC or USDT depositor. It transitioned the system from a state of bad debt to a state of solvency backed by an unsecured loan against Fluid itself. To suggest USDC and USDT depositors were put at harm through this step is braind dead. They transitioned from a state of bad debt of 8 m to being creditors to an 8m credit line to Fluid, which in the worst case (Fluid not paying it down) would place them in the original situation to begin with, a situation of 8m in bad debt. Obviously Fluid only did this because it is clear from their on chain treasury and the strength of their business that they can and will pay down that credit this week. Was it necessary to do it this way? Yes it seems clear they had to settle with Resolv quickly, and unwinding treasury positions in that timeframe wasn't feasible. Should they have communicated the intermediate step better? Probably, to prevent any confusion. In any case, instead of celebrating Fluid for choosing to cover its users (something vault curators on Morpho have not done) the aerodrome cabal desperately tries to spin it into a scandal. From where I sit, Fluid has consistently put its users first. This was the first instance of bad debt on Fluid lending market, but they also covered all losses in the Lite ETH vault that came from market conditions creating negative carry. Again, no obligation. Spiking ETH borrow rates are a known risk every staked ETH looper accepts in exchange for the elevated yield in normal regimes. Two different cultures. One builds, absorbs losses, protects depositors. The other tweets.

@MaksimXBT my tweet was not about whether bailing out depositors is a good thing or not

@letsgetonchain rallies like DeFi United are temporary, the space still lacks a systemic solution to bad debt

there must have had good resons imo to prioritize speed. the situation with resolve must have been extremely complex with many stakeholders involved. afaik fluid is the only affected protocol that has settled with them already. in any case i dont rly see what other motives one can see that they could have besides this being the best way to ensuring depositors are made whole

@Ceazor7 @letsgetonchain Fluid wants to repay the bad debt with treasury and team funds. They added an intermediary step of borrowing 8m unsecured from lenders and repaying the current bad debt w/ it. Now plan to repay the 8m to the credit line when gov votes pass. Idk why speed was prioritized

@dpotsdobeck @eldarcap agree with you as long as transparency is done in good faith and centered around protecting users. doesnt seem to me that this was the goal here. yeah there is a dao treasury and a treasury from the company providing services to the DAO.

the push for transparency is net positive, and ultimately in defense of FLUID holders Aave Treasury was the DAO treasury. not sure what Fluid Business Treasury is exactly but sounds like different than DAO treasury. for everyone involved’s sake i hope a big nothing burger but from outside view im still confused 😅

i havent followed all the comms that you mention but my best guess is that they had a good reason for acting fast. a reason that in the end would lead to a better situation for their users. i can only imagine how complex the legal and negotiating situation must have been wrt resolve and all the stakeholders involved it sounds to me like they went for the most pragmatic somution of executing this

"To execute, they replaced the bad debt with an unsecured credit line originally approved for another purpose." This erodes trust personally for me. The governance is a farce now and can never be trusted. A vote 3 days after you do something is a week too late. The final result makes sense but poor comms and contradictions from Fluid team/founder: - Said this did not happen - only treasury funds were then said they did use the funds approved by governance for another item - A governance is coming though we've already bypassed it but trust us - Team will cover the 1.5 mil windfall but now its 1 mil in future revenue

its reputation based. and the business itself is pretty much the collateral here. there could not be more skin in the game. as to transparency about the solvency of the line anyone could monitor it fully on chain. the funds were used for a stablecoin amm position. also all of this was known, i dont understand your point.

@letsgetonchain Its literally "Trust me bro" what happens if they cant pay back? There is literally zero user protection in this scenario. Like I said this is insane and no one else anywhere is taking UNSECURED loans from user funds. Wild

@SSJCurrency oke OG ve Aero holder

@letsgetonchain This will be your most viewed post. Didn't bother to read a Gemini pro prompt. Gotta farm that engagement somehow

@hooftly a piggy bank? As a depositor, I decide if I underwrite the r/r of a lending protocol. The credit line line was fully backed by stablecoin DEX liquidity and paid borrow rates to depositors.

@letsgetonchain Even asking governance for an unsecured loan before the hack is insane. Name one other protocol that has ever done this. Using user funds as a piggy bank. Who controls the most governance power? You can't be serious right now.

i agree with you around aggressively forcing transparency! but if there was anything remotely close to caring about transparency or caring about users, @jpn_memelord would have approached the team first with his concerns. The case would then have been closed and their could have been a clean statement about the mechanics behind executing the bad debt coverage. There was no need for any drama. Especially given the reputation of the fluid team, they have acted with the highest integrity for the last seven years since existence. Unwarranted fud can actually end up really hurting users. from with his exchange with @smykjain I understand he did not ever attempt to reach out to the team!

As a fan of both, I don't think there's anything wrong with calls for aggressive levels of transparency. Even if well intentioned, I'd want to know if there were abnormal opsec/treasury/multi-sig changes happening to a protocol I was using. My take on FLUID is that probably nothing wrong was done substantively, but a simple post that nobody would read or understand about their intended methodology would have probably avoided this whole debacle. Basically the whistleblowing is probably for nothing here but people should keep whistleblowing in these situations when billions are at stake.

more here from the team

@LowBeta @Re7Capital seems very vague without more details on the methodology behind "composite complexity and tail risk"

This is an incredible chart from @Re7Capital showing risk and return across DeFi strategies They find that AMM liquidity provision is uniquely attractive risk/reward