Iron Bank and Alpha Homora Conflict Summarized
Alpha Finance Lab
by Alpha Homora
11M ago
Overview of What Happened On March 1, 2023, Iron Bank (IB), an integrating partner of Alpha Homora (AH), unilaterally changed the smart contract configuration, preventing lenders on AH from withdrawing their liquidity. This was due to the unresolved debt between the two protocols, AH and IB, that has existed since the code exploit attack in 2021. Despite AH's commitment to adhering to an agreed-upon plan to repay the debt, IB failed to liquidate collateral when required, resulting in a hole in their protocol. As a result, IB upgraded their code to freeze depositors’ funds without AH’s knowledg ..read more
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Eighth Open Letter to Iron Bank
Alpha Finance Lab
by Alpha Homora
1y ago
As a result of the recent voting to determine a path forward regarding an issue with Iron Bank (IB), depositors, who interacted with Alpha Homora frontend to deposit funds into IB, have voted to stop negotiating with IB (Path 1). As outlined in the details of Path 1, IB will have until April 28, 2023 8AM UTC (120 hours since the voting ended) to unfreeze the depositors’ funds before Alpha and users 1/ work together to take appropriate legal action against IB and 2/ discuss a separate goodwill fund that Alpha will set up for depositors. Alpha Homora and IB’s collaboration started on a friendly ..read more
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Seventh Open Letter to Alpha Homora Depositors
Alpha Finance Lab
by Alpha Homora
1y ago
Based on Iron Bank’s (IB) response to the 6th Open Letter, IB did not pick any solution. This means the default path forward (“Original Plan B”) would be to stop negotiating and move forward with the understanding that IB does not cooperate. In this path, Alpha will stop negotiating with IB on behalf of depositors and set up a separate fund as a goodwill gesture for depositors since funds are stuck in IB. IB will have 120 hours, from when the Original Plan B is chosen as a next step, to unfreeze the depositors’ funds before Alpha and users work together to take legal action against IB. Since I ..read more
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Sixth Open Letter to Iron Bank
Alpha Finance Lab
by Alpha Homora
1y ago
Since 2021, there exists bad debt between Alpha Homora and Iron Bank (IB). The two protocols work through protocol-to-protocol lending mechanism, and thus it was appropriate for the issue to be resolved between the two protocols. At the time, both protocols agreed to this agreement to settle the debt. This has been the default way ever since. Since IB froze users’ funds and demanded for accelerated payments from Alpha despite having the original agreement in place, we have discussed with users and IB via open letters and other channels and proposed a solution for accelerated payment method tha ..read more
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Fifth Open Letter to Alpha Community
Alpha Finance Lab
by Alpha Homora
1y ago
Per Alpha’s Fourth Open Letter, the Alpha depositors have voted for Alpha to negotiate with Iron Bank (IB) in order to find middle ground for the bad debt repayment. After the voting result, we have been exploring potential solutions taking into account the depositors’ feedback and IB’s proposal to unpause certain markets if the debts are fully repaid in any of those markets. We’d like to assure the community that this matter is of utmost importance to us, and we apologize for not being able to communicate sooner as we had to take time to consider all possible options to ensure that the soluti ..read more
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Third Open Letter to Iron Bank
Alpha Finance Lab
by Tascha Punyaneramitdee
1y ago
By disabling user withdrawals, Iron Bank has taken users’ funds. The bad debt is a separate matter from users’ funds held in trust by Iron Bank, as these funds are not Alpha’s. Seizing users’ funds is not the solution and should not be a solution to any problem because it is as if a custodian seizes money held in its trust. Iron Bank, to our shock, has revealed itself to have centralized control over the network, and therefore it is acting similarly to a centralized lending platform. While we are legally advised to take this negotiation directly with Iron Bank, we choose to put forth a solutio ..read more
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Second Open Letter to Iron Bank
Alpha Finance Lab
by Tascha Punyaneramitdee
1y ago
Context On March 1st, around 8:20PM UTC+7, Iron Bank, which is a protocol spin off from the team behind C.R.E.A.M., made a config change in their protocol. This change is unilateral without notice and now prevents lenders from withdrawing their liquidity. The Alpha team and community are very concerned and issued the first Open Letter, which can be found here. After issuing the first Open Letter, we have continued to reach out to Iron Bank to get on a call to discuss a solution including how debt will be paid off, what to do with collateral, and how everyone will be made whole. They rejected h ..read more
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An Open Letter to Iron Bank
Alpha Finance Lab
by Tascha Punyaneramitdee
1y ago
I am writing to express concern about actions taken by Iron Bank that harms depositors and to urge Iron Bank to take immediate action to reverse your actions. Around 8:20PM UTC+7, a code change was made in the code of Iron Bank, a protocol spin off from the team behind C.R.E.A.M. This change appears to have been unilateral without notice and now prevents lenders to withdraw their liquidity. I am deeply concerned that this may be misappropriation of users’ funds. Here is what happened: Since 2021, there exists bad debt between Alpha Homora and Iron Bank. The two protocols work through protocol ..read more
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How the Money Market in DeFi Has Reached Its Limit, And How We Invented the “Profit-sharing Primitive” to Break It
Alpha Finance Lab
by Jungruethai Songthammakul
1y ago
Money markets are an important part of the DeFi ecosystem, providing a platform for users to lend and borrow digital assets. These lending protocols allow users to earn interest on their deposited assets or borrow assets with collateral, creating a more accessible and efficient financial system. However, despite the many benefits of money markets in DeFi, they face several challenges related to their stability and, most importantly, scalability. The Biggest Challenge in Money Market and Its Root Cause: Scalability and Interest Rate Model (IRM) The recent CeFi collapse has pushed institutions ..read more
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Simplifying Crypto Structured Products
Alpha Finance Lab
by Kartik Jain
1y ago
Overview In Traditional Finance (TradFi), structured products are essentially managed investment products or packaged financial products whose value is linked to an underlying asset or basket of assets such as market indices, stocks, bonds or a mix of these. Structured products have a pre-defined maturity date, different yield-bearing profiles and payoff curves, ideally sold to investors who want to have exposure to certain thesis in the market. The global structured products market size was over $7 Trillion in 2019, reflecting just 1% of the $700 Trillion derivatives market as per Bloomberg ..read more
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