Abstract

As an impacted member of the Exactly Protocol community, I propose the establishment of a compensation mechanism to address the financial losses incurred as a result of the security breach that transpired on August 18, 2023.

Background

On August 18, 2023, the Exactly Protocol experienced a security breach, leading to substantial financial losses totaling approximately $7.6 million. This breach has been attributed to vulnerabilities within the 'DebtManager' peripheral contract. A comprehensive analysis of the incident can be found here: https://medium.com/@exactly_protocol/exactly-protocol-incident-post-mortem-b4293d97e3ed. An ongoing investigation has been initiated by the Homeland Security Department in New York, identified by case number NY02HR23NY0001.

Proposal Details

EXA Token Compensation

Amount: The distribution of one million EXA tokens among the 117 affected users is proposed. This allocation constitutes:

• 10% of the total EXA token supply
• Approximately 20% of the EXA token supply designated for the community

Vesting: The vesting of these tokens will commence in June 2024, following a linear vesting schedule spanning 48 months, similar to the new EXA token vesting schedule approved in EXAIP-02.

Sablier NFT as a Compensation Token

Impacted users will promptly receive a Sablier NFT as a symbol of their claim to the allocated EXA tokens. In the event that stolen funds are recovered prior to June 1, 2024, the value of the NFT (and, by extension, the EXA token compensation) will be adjusted proportionally. For example, a 50% recovery of funds will result in a 50% reduction in the NFT's value.

Transparency and Ongoing Investigation

It is encouraged that the Exactly Protocol maintains transparent and open communication regarding the progress of the Homeland Security investigation. Members of the community should remain united and optimistic, especially if there are no significant changes in the status of the stolen funds.

Rationale

Reestablishing trust within our community is of paramount importance. The proposed utilization of Sablier NFTs not only ensures transparency but also provides a flexible solution that can adapt in response to potential asset recovery.

Action Items

Implementation: If this proposal is approved, execute the proposal in accordance with the outlined plan.