4Belt Compensation Plan
Two days ago, Belt Finance was attacked with a flash loan exploit and suffered damages to our funds, and more importantly, to the trust of our users. As Belt is a service designed for bringing peace of mind to its users, the emotional and monetary damages inflicted upon us and our users was all the more heartbreaking. After releasing the incident report, we sought to find a solution that would hopefully return the trust vested in us, by the way of compensating our users for our shortcomings.
There are two main intended audiences for this compensation plan.
The first and more obvious are the users who have had their funds in our 4Belt pool or beltBUSD vault. The exploit directly affected these users, as the attack targeted the BUSD balance in our 4Belt pool.
The second target of this plan are the holders of BELT tokens. The price of the BELT token is a direct reflection of the value of Belt Finance as a protocol, and while BELT may not be a part of our 4Belt pool, it is representative of the faith our users have vested in us.
While this compensation plan was designed primarily with the above two audiences in mind, we wish to express our gratitude to all users of Belt Finance for their continued support. We hope this compensation plan will be a testament to our devotion to making this right for our users, and that we will grow together stronger as a community, evolving and innovating the field of decentralized finance.
The Belt Finance team is committed to reversing the damages incurred in regards to this recent incident, and remains committed to developing Belt Finance to be the best DeFi protocol possible.
This is our compensation plan in its entirety.
Compensation Methods
- remedy4BELT (r4BELT) and pool
A snapshot of the 4Belt pool and 4BELT token holders will be taken and users affected by the exploit will be airdropped the remedy4BELT (r4BELT) token in proportion to their 4Belt LP and/or beltBUSD holdings before the attack. The r4BELT token will be used as a tool to mark the users that were affected by the attack.
Users affected by the attack can use their r4BELT to receive compensation over time. They can also choose to give ownership of their r4BELT to others through trading.
To receive compensation, users affected by the attack have to pair their 4BELT with newly received r4BELT as PancakeSwap LP. This 4BELT-r4BELT LP must be staked on Belt Finance to receive the compensation given to r4BELT over time.
2. Using the team’s build allocation for compensation
The recovery will happen through a variety of methods and resources. The Belt team is committed to this recovery and will use the team build allocation and the team’s other assets to aid in the compensation.
- From the team’s build allocation, 67% of the unlocked portion will be distributed to r4BELT compensation. This amounts to 864 BELT per day. This was the maximum amount we could commit to the recovery while making sure we had the resources to continue developing Belt Finance as a platform from both technologic and marketing perspectives.
- The BELT mining rate will stay the same but 15% of the distribution will now go to the 4BELT- r4BELT LP pool. This will also create opportunities for 4BELT users as their pool share will change as some go to the new pool and some remain in the original 4BELT pool. This will also create new tradable liquidity for r4BELT for those who wish to trade it immediately.
Contrary to some of the FUD going around, the Belt Finance team has never once sold any of our BELT allocation. This can be transparently seen on BSCScan. You can check this through BSC Scan. These are the build allocation team wallets:
- 0x7111d0f651a331bc2b9eefcfe56d8a03f92601a1
- 0xdd1f8e16adb326405496f898142a5fb6934f132b
3. A $3M USD Buyback fund
We are also committing $3 million USD to create a new BELT Buyback fund. We are sourcing $1.5M of this fund from the PancakeSwap IFO we launched with. This will add a buy-side pressure to the BELT token over time and aid to increase BELT value, which will increase the APR for all of our pools/vaults. This is part of our initiative to increase BELT value to make liquidity mining on BELT as profitable as possible.
In addition to this, we will continue to add as much as possible to this buyback fund.
As the majority of the losses from this exploit went to fees for other protocols rather than the attacker, we are in talks with the relevant protocol teams to see if it is possible to recuperate some of what they received, back to our users.
Below is a breakdown from Peckshield of where the profits of the exploited funds went:
About remedy4BELT and Mining Distribution Rate Changes
Using the snapshot, r4BELT will be distributed in the following ratio:
- 4BELT:r4BELT = 0.961:0.057
Part of the BSC BELT Distribution rate will be shifted to the new r4BELT pool. The changes are as follows:
As we stated above, we will use 67% of the unlocked portion of the team build allocation to aid in recovery through distribution to the r4BELT pool. This equates to about 3% of total daily emissions. This will have the accumulative effect of adding more BELT distribution to 4BELT-r4BELT.
The compensation is directed to r4BELT holders. r4BELT holders have two options with this compensation.
- r4BELT can be staked in the 4BELT-r4BELT pool to receive total compensation over time.
- r4BELT can be sold immediately through this incentivized LP pool.
The r4BELT token can be understood as a bond with the promise of Belt Finance to compensate affected users totally over time. The price may fluctuate as new users purchase the r4BELT token to receive yield or as affected users sell what they received. In the new pool, as 4BELT price is comparably stable, compounding rewards will increase the value of r4BELT itself.
The Team’s Intent
We, the Belt Finance team, feel deep remorse for what has happened, and how it has affected our users and are doing everything possible to take responsibility. While we are aware that not all of our users will be satisfied with the compensation methods we have chosen, we strongly believe it to be the most optimal solution we can offer at the moment. Below are the reasons as to why we believe that is the case.
With this compensation plan, we are focused on identifying the specific users who were affected by this attack, and to minimize the monetary damages done to these users.
We are taking responsibility and trying to recuperate the damages to the best of our ability:
- By allocating a part of the BELT build allocation to compensating the affected users
- By buying back BELT tokens with team funds to protect BELT holders.
- By, most importantly, continuing to grow and improve the protocol to the best of our ability.
We, as the current operators of the governance of Belt, have the responsibility to grow and improve the protocol, protect our users, and improve BELT price while maintaining its token economy. We will use every effort to do so. The multi-vault system is a core component of Belt Finance, and our compensation plan utilizes Belt token economy while maintaining its structure. This is equally important for a successful and meaningful compensation as the price integrity of BELT is crucial for the Belt ecosystem as a whole. This will also accelerate the effect of our compensation plan and grow the platform to be more profitable for all.
We have contemplated in various ways as to how this compensation plan might affect the economy of Belt Finance in general. It may not be a perfect solution, or an immediate one. We believe, however, that in the long run, this is a solution that will prove to compensate effectively and add to the growth of Belt Finance as a whole.
Once again, we humbly apologize for what happened and thank you for your continued support and faith in us while we navigate these turbulent times. We hope you will accompany us on this journey to recovery, and beyond.
- Withdrawals will open on June 2nd at 16:00 GMT+9. We are taking the utmost caution in reviewing our code before reopening. We are in the process of upgrading our monitoring tools and having additional audits performed. We apologize for the inconvenience.
