Postmortem of Pool #136

4 min readApr 12, 2022


The events that occurred yesterday were not in line with our core values or the expectations of our community. We are working diligently on several solutions because we remain fully committed to this project and to all of you.

As we continue to serve our partner communities, we want to assure you that our core technology — Angel Vaults and Branded Dollars — were not the cause of or related to yesterday’s volatility.

Yesterday’s sell-off was caused by an isolated issue related to Rari pool #136 where some users were using $ICHI to borrow and buy more $ICHI. Demand for loans in the Rari pool drove interest rates to an unsustainable level and incentivized the selling of $ICHI in order to exit leveraged positions and pay back loans.

A sale of approximately $10 million in $ICHI tokens resulted in an initial price decline which then initiated a reaction of more users selling their $ICHI. This rapid decrease in price put borrowers at risk of liquidation and a cascading liquidation event occurred as described in the timeline below. We will continue to monitor Rari pool #136 and further investigate all events that led up to cascading liquidations in order to ensure that this never happens to our community again.

Our priority now is to seek solutions to provide stability to our ecosystem and partners, starting with users who deposited to Rari pool #136 but did not borrow. If you are in this group or have specific questions for the ICHI team, please open a ticket in Discord for support:

We have compiled a detailed timeline of the last several days below along with the steps we have already taken to stabilize $ICHI and our immediate path forward. We will continue to provide updates on all of these efforts as we work to rebuild your trust and continue on our mission.


Wednesday, April 5:

The size of ICHI’s Angel Vault in relation to Market Cap was 17.55% (above the suggested target based on historical performance of 15%).

Thursday, April 7 to Friday, April 8:

ICHI’s price rose from $79 to $139 in just over 24 hours on $50M in trading volume (20X normal levels) and the Market Cap grew from $354M to $599M.

This price jump was primarily due to USDC, oneUNI, and oneBTC being borrowed and used to buy $ICHI. This $ICHI was then supplied back to Rari and used to borrow more funds until the utilization rate of borrowable assets in the Rari pool hit 100%, creating highly over-leveraged positions.

The Angel Vault was not able to keep up with the rapid rise in Market Cap (the size of the Vault in relation to Market Cap dropped from 17.55% to less than 7% within 24 hours).

Friday, April 8:

We increased the borrowing interest rates to deter people from borrowing more and incentivize the repayment of borrowed funds. Despite this action, some wallets continued to borrow at interest rates above 200%.

Saturday, April 9:

Due to the continued borrowing on April 8, we added $2M in USDC from ICHI treasuries to increase liquidity in the system and restore confidence for suppliers. Select wallets continued to borrow this newly supplied USDC at exceedingly high interest rates.

This borrowing was still being done to buy ICHI. In response, we capped the ability to supply $ICHI to Rari and added an additional $2M of USDC.

We also spread out the concentrated positions in our ICHI Angel and HODL Vaults to a range between 55% of the current price to the current price. This is a normal action taken in the case of rapid price increases and the heightened risks of increased volatility.

These collective actions slowed the borrowing and returned ~10% liquidity to the Rari Fuse pool.

Monday, April 11:

There was an initial large sell of ~$10M of $ICHI. Because of this sell order and a broader market sell-off, we took several steps to protect the community, including: rebalancing ICHI Angel Vaults to further spread liquidity, disabling borrowing through Rari and avoiding liquidations by increasing LTV ratios in Rari without the ability to further borrow.

Immediate Actions & Next Steps

Action #1: ICHI can no longer be supplied to Rari. This will prevent people from borrowing against ICHI to buy more ICHI.

Action #2: xICHI supply cap in Rari will only be allowed to increase by a maximum of 5% of current levels at all times in order to prevent overleveraged positions at high interest rates. xICHI supply and borrowing behavior will be monitored to see if xICHI begins to be used as collateral to borrow at unstainable interest rates.

Action #3: We have begun compiling a list of addresses that supplied assets to Rari but did not borrow against those assets. Our goal is to first support community members who participated in the system without borrowing, and we are assessing paths to restoring liquidity to Rari.

Action #4: We plan to increase rewards to focus on the oneBTC/ICHI Angel Vault and wBTC HODL vault on MainNet and Polygon. This will provide the strongest opportunity to grow and support the community.

Action #5: Continue to review our Rari pool strategy which includes bringing interest rates down to align with industry standards.

ICHI values the community and we thank you for your patience and support in this difficult time. We are working hard to resolve the issues at hand and will continue to consult with, include and update our community as the situation develops. There will be many lessons identified from this incident and we are committed to learning from them and ultimately moving forward as a stronger protocol.

** Stay tuned for updates. We will alert the community with new and additional information as we continue our investigation and more details are discovered.**




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