RFP-50: Remediation Funding Methods for Depositors

Abstract

The Radiant DAO aims to maximize remediation for depositors affected by the exploit in the Arbitrum and BNB Chain Core markets. To achieve this, the DAO proposes multiple remediation avenues, leveraging various sources across different timeframes.

RFP-47 established the groundwork by migrating all deposits off-chain and ensuring accurate reconciliation with each user's deposits, including any associated losses of unclaimed dLP rewards and RIZ vault deposits that were backed by the drained core market deposits. It also initiated the necessary infrastructure for asset verification and claim contracts.

This proposal details how the different remediation methods will function and interact to facilitate an effective remediation process.

Motivation and Rationale

On October 16, 2025, Radiant suffered a sophisticated security breach, resulting in the loss of over $50 million of core market deposits on the Arbitrum and BNB chains. The DAO reserve wallet currently holds >$3M in RDNT, which is insufficient to independently support remediation efforts. Additionally, a portion of these funds is already allocated due to prior agreements. Even if the DAO were to liquidate all its RDNT, the actual USD value raised would be significantly lower due to the selling pressure. As a result, alternative strategies and new approaches are necessary.

Key Terms

Remediation Claim Contracts: Smart contracts designed to facilitate and automate the distribution of remediation funds to eligible recipients.

Emissions Reserve (eRev): Designated pool of funds set aside to support ongoing ecosystem incentives.

Remediation Multi-sig

To clearly distinguish the remediation effort and maintain transparency, a dedicated Remediation Multi-Sig wallet will be created. This wallet will serve as the central receiver for all funds allocated to the remediation process, including payouts for the Convenience Class and deposits for the Remediation Claim Contracts.

As the primary wallet for remediation, the Remediation Multi-Sig will consolidate funds from various sources, providing a clear view of the effort’s financial progress. The sources of these funds could include:

1. Protocol fee transfers from the DAO Treasury

2. Transfers from the DAO Reserve

3. Contributions from partners

4. Donations from third parties

5. Recovered lost funds

Addendum 1 (below): DAO Remediation Multisig Wallet Signers

Remediation Methods

1. Protocol Fees Deposits

The Radiant DAO intends to allocate funds from its ongoing operations to the Remediation Claim Contracts. Specifically, fees generated and initially directed to the Emissions Reserve will be rerouted to the Remediation Multi-Sig wallet.

Under RFP-50, a portion (TBD in a future RFP) of the fees generated is allocated to the Emissions Reserve (eRev) wallet to ensure emissions remain a sustainable component of Radiant’s economic framework. However, eRev will initially have a dual-use, the traditional eRev purpose AND remediation. In year 1, all (100%) of this TBD portion of protocol fees being sent to eRev will be fully (100%) used for remediation and reduced by 25% every year as follows:

• 2025: 100% Remediation, 0% Emission Reserve

• 2026: 75% Remediation, 25% Emissions Reserve

• 2027: 50% Remediation, 50% Emissions Reserve

• 2028: 25% Remediation, 75% Emissions Reserve

• 2029: 0% Remediation, 100% Emissions Reserve

  The DAO plans to make these deposits on a quarterly basis.

2. Partner Deposits & Bailouts

The Radiant DAO will work closely with its partners through direct communication, DAO proposals, or contractual agreements to facilitate contributions. Partners can contribute by sending funds directly to the Remediation Multi-Sig wallet or to the Remediation Claim Contracts which operate without requiring direct intervention from the Radiant DAO.

The DAO is particularly interested in securing support from:

• Binance Burn Program

• Arbitrum DAO Grants

• LayerZero DAO Grants

• Other ecosystem grants and funding opportunities that align with the remediation effort

• Strategic partnerships with key stakeholders to enhance financial support and sustainability

• Radiant will actively seek investor participation at every opportunity as well

To attract and sustain investor interest, the DAO must first focus on strengthening the overall success and stability of the protocol. A thriving ecosystem with strong financial health and clear investment opportunities will naturally increase investor engagement.

3. RDNT-Denominated RIZ Debt Position

The Radiant DAO plans to leverage its RDNT reserves to support the remediation process. However, directly selling or distributing a large volume of RDNT could create significant selling pressure, ultimately reducing the effectiveness of remediation efforts. Additionally, RDNT and dLP holders may be incentivized to sell, further intensifying the issue. To align stakeholders interests, the Radiant DAO will establish an RDNT-denominated RIZ debt position on Arbitrum.

Integrating a RDNT/USDC (Arbitrum) market into RIZ unlocks new economic opportunities for both users and the DAO. By depositing and borrowing funds within the RDNT RIZ markets, the DAO can transform what would otherwise be a negative impact into a positive force, strengthening the protocol’s overall health.

If the DAO deposits RDNT into the RDNT RIZ markets, it will:

• Earn interest, which can be used to offset USD interest rates or directly fund the remediation effort.

• Establish a collateral position that allows the DAO to take out USDC loans from RIZ Vaults.

The resulting effects include:

• Borrowed USDC can be used to remediate users.

• Increased Total Value Locked (TVL).

• Interest paid on loans by the DAO will generate higher returns for USDC depositors.

• Users borrowing RDNT will effectively pay interest to the DAO.

Together, these mechanisms create positive feedback loops that reinforce the protocol’s growth while facilitating the remediation process.

Addendum 2 (below): RDNT RIZ Market Parameters

Addendum 3 (below): RDNT RIZ Debt Management Framework for the DAO

4. Engaging Institutional Lenders

Radiant DAO will explore securing debt from institutional crypto lenders, leveraging DAO-held assets as collateral. By accessing structured loans, the DAO may obtain liquidity for remediation efforts without liquidating DAO reserves.

Key benefits include:

• Preserving DAO Assets: Avoids direct selling of RDNT, reducing market impact.

• Flexible Repayment: Loans can be repaid over time using OpEx protocol revenue.

• Increased Funding Capacity: Institutional lending offers larger capital access than internal RIZ markets alone.

• Diversified Capital Sources: Reduces reliance on protocol fees and deposits.

To attract lender interest, the DAO must diversify its held assets to include a broader range of crypto assets. By diversifying, the DAO can enhance its creditworthiness and provide greater flexibility for institutional lenders. These assets will serve as collateral, increasing the chances of securing favorable loan terms.

5. Recovered Lost Funds

The protocol, its partners, security experts, and law enforcement take a multifaceted approach to fund recovery and depositor protection. Any recovered funds would be sent to the remediation wallet.

Steps to Implement

1. Establish a Remediation Multi-Sig Wallet to manage all remediation-related assets.

2. Implement protocol fee deposits into the Remediation Multi-Sig Wallet.

3. Engage partners, investors to secure incentives, contributions or bailouts.

4. Integrate RDNT into RIZ Isolated Markets on Arbitrum.

5. Create an RDNT-denominated RIZ debt position utilizing DAO RDNT reserves.

6. Allocate USDC debt for the Remediation effort.

7. Engage Institutional Lenders

Cost Analysis

• Protocol Fee Allocation: A TBD portion of protocol fees (allocated to the Emissions Reserve) is redirected to remediation efforts, decreasing annually thereafter.

• RDNT Reserve Deposit: DAO deposits RDNT into RDNT/USDC RIZ market.

• USDC Borrowing Costs: Interest on borrowed USDC from RIZ vaults.

• Infrastructure & Management: Ongoing costs for maintaining the Remediation Multi-Sig, Claim Contracts, and operational support.

Voting

In Favor: By voting in favor, you agree to ALL prerequisites, steps, and implementations in this proposal.

Against: Rejecting RFP-50 as proposed.

Abstained: Undecided, but contributing to quorum.

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Addendum 1: DAO Remediation Multisig Wallet Signers

Addendum 2: RDNT RIZ Market Parameters

Addendum 3: RDNT RIZ Debt Management Framework for the DAO

Addendum 4: Notice to users