EasyFi Network
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EasyFi Network

Interim Compensation plan

EasyFi Security Incident

TLDR:

  • EasyFi will compensate 100% of the lenders/depositors net balances in the best interests of all stakeholders & users.
  • EasyFi has onboarded new strategic investors & strong backers to help expand the protocol operations & business.
  • EasyFi has opened another round of funds for strategic investors and has already raised a sizable amount.
  • We are releasing a carefully thought out compensation plan for user’s funds deposited in protocol contracts on the Polygon Network.
  • We will consider the net balances of each address as per snapshot at block height #13464478 on the Polygon Network i.e. before the hack happened.
  • Users will get funds in two parts — 25% of their funds will be compensated immediately, 75% will be in EZ IOUs (I Owe You)
  • EZ IOU will be an ERC20 token backed in ratio of 1:1 with EASY V2 i.e. EZ tokens that offers multiple benefits
  • EZ IOUs holders to receive benefits from EasyFi and partner projects under multiple new incentivization programs.

Background

On Monday, 19th April 2021, malicious hackers under a well-planned sophisticated attack, attacked the EasyFi contracts on the Polygon network & Ethereum network. EasyFi is a multichain layer 2 protocol live on three networks, protocol contracts on the Binance Smart chain remained unaffected from the incident.

We are working with different experts, partners & teams to get deep insights on the hack and track the hacker but it’s a time-consuming exercise and we don’t want to keep our users waiting to learn more about their recovery of lost funds. We are committed to making our users whole over time even, currently, we are unable to recover lost funds. Therefore, we choose to compensate depositors unconditionally and in a swift manner.

With the support of our community of 25000+ members across different countries & untiring team efforts we managed to make a mark in the market but still, we are in very early stages as a product & business. We don’t have enough in the treasury to compensate our users in one go but that’s what we would have done if that were the case. We have carefully thought of a compensation plan in the best interests of all stakeholders & users and now sharing it with the community to gather feedback.

New Strategic Investors & Backers

It’s important to keep the treasury healthy while keeping enough runway for the protocol in the long term. Therefore, we started raising funds during ongoing multi-chain expansion and accelerated the round immediately after the incident. While the exercise is still ongoing, we have raised a sizable amount already to move ahead as per the plans. This round shall help EasyFi expand protocol infrastructure across new networks & introduce a brand new line of products as planned earlier. Besides expansion, EasyFi shall be more focused on adoption & usage. So expect a lot more innovation in the direction. We are glad to gather support from all corners of the ecosystem and thank our new strategic partners and backers who believed in us and offered a helping hand in difficult times. More details in this regard shall be made public once we close the ongoing exercise.

Post Mortem

We have been very actively communicating with our users & community about the progress on this front and shared through our official communication channels & media partners all the relevant information and data. Since investigations are still ongoing, we cannot disclose all details & sensitive information at this point in time. But we are near closure & shall release requisite information in the public domain as an investigation report is received and necessary action taken.

Compensation Plan

We have carefully analyzed to ascertain how our users have been affected. All relevant & necessary data is being collated and recorded for the purpose at the time of writing this article. A list containing all addresses and corresponding balances shall be made public soon.

We have decided to compensate 100% of the user’s funds (liquidity providers/lenders) so deposited in protocol contracts on the Polygon network. For this purpose, we have decided to take into consideration the net balances of each address as per snapshot at block height #13464478 on the Polygon network.

All the lenders/depositors who deposited any assets in all markets shall be compensated 100% against their net deposits in two parts as mentioned below:

I. 25% of the total amount deposited by the users to be paid in stable coins immediately.

EZ IOUs

II. The remaining 75% of the total amount deposited by the users shall be paid in EZ (IOUs) which are backed by EASY V2 tokens EZ in a 1:1 ratio. That literally translates to, “I Owe You”.

  1. EZ IOUs shall carry a 25% discount on the prevailing spot price of EZ in secondary markets at the time of distribution.
  2. EZ IOUs would be easily redeemable in the ratio of 1:1 against EASY V2 token EZ through a dedicated dashboard. Hence 1 EZ (IOU) = 1 EZ, always.
  3. EZ IOUs will be distributed immediately to users for their equivalent amount of remaining deposits in the protocol (Total net deposits minus paid 25% as stated above) but redeemable over a period of 6 months against EASY V2 tokens EZ.
  4. Redeemable EZ tokens to be unlocked, proportionately, per block on the Polygon Network & can be claimed by users at their convenience.
  5. EZ IOUs are ERC20 tokens, therefore, are easily tradable over DEXs & exchanges, if they choose to list. Hence a very liquid market of EZ IOUs can be created to facilitate liquidity to EZ IOUs holders at any point in time.

Pertinent to note that users who deposited volatile assets in EasyFi lending markets on Polygon network shall be compensated as per prevailing spot price of respective asset during the time of distribution.

As a reminder, EZ is the governance token for EasyFi and is currently a highly liquid token on top exchanges like Binance, AscendEx, Bilaxy, Gate, Uniswap, Quickswap & other exchanges.

We believe IOUs are a great instrument to create immediate liquidity for liquidity providers/depositors while protecting the secondary market of EZ from abnormal sell side pressure on order books. While EZ and EZ IOU holders can earn rewards from protocol functioning.

Benefits for EZ IOU holders:

● 100 % backed by vested EZ tokens in ratio 1:1

● 25% discount on spot price of EZ at the time of distribution

● Immediately redeemable against unlocked EZ on Polygon network

● Transferable & tradeable similar to any ERC20 token

● Surprise airdrops of tokens from partner projects

● Other incentivization programs

● Preference in EasyFi Access program

To learn more about $EASY and EasyFi, please go through our whitepaper and other articles on this publication.

Stay tuned for more news & updates on our Telegram channel and join the official group. You can also follow us on Twitter.

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EasyFi Network

EasyFi Network is a Layer 2 DeFi Lending protocol for Digital Assets. Taking a strong community-oriented governance approach with $EZ