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Fusion: Foundation Wallet Theft Updates, USAN swap is live, 2 million FSN — open source community campaign

Biweekly update 2nd October — 16th October

Dear Fusionites, these weeks, we saw a lot of essential news.
As many of you knows, on September 28th 2019, the Fusion swap wallet was compromised, resulting in theft of 10 million native FSN and 3.5 million ERC20 FSN token. Investigations so far show that this is the only wallet affected. Furthermore, as of now, the team has not received any report that other holders’ wallet were impacted. After the currency was stolen, abnormal wash-trading behaviour occurred, and some of the stolen tokens were sold across exchanges, in particular Bitmax and Hotbit. The team provided official update on this situation. Last week, they proposed three recovery solutions for this Wallet Theft, a chance for community to vote on the preferred option, and answered to other questions surrounding the impact of stolen tokens including burning FSN with recovered BTC/ETH funds. Details are in our report below.
You can also read Release Notes 3.4 to see the new features and improvements deployed to Fusion’s user-facing applications over the past development sprint. Most excitingly, Universal Short Account Number (USAN) swap is now live! It enables users to trade their USAN numbers for any other digital asset using Fusion’s quantum swap feature. Moreover, the team introduced live transaction status for all wallet functions — create asset, send asset, time lock, make, take and recall swaps. Check it out!
And last but not least, to harness the potential of the open-source community, Fusion Foundation has established the 2 Million FSN campaign! Fusion believes that the community has the capacity to significantly help lead the project into the future. They want to vigorously promote the sustainable development of the open-source community and leverage the diverse range of skills possessed by community members. Whether you are a developer, researcher, tester, early adopter, designer, content creator, product manager, translator, staker or anything else, Fusion wants you on their team.
Fusionites, follow Paradigm to learn about all the news emerging from the world of Fusion!


GitHub metrics:

Developer activity (from

Release Notes 3.4:

Check out Fusion’s Release Notes 3.4 that detail the new features and improvements that were deployed to Fusion’s frontend applications over the previous development sprint.

Community members can track upcoming new features, fixes and amendments in the Fusion public Trello board.

If you notice any bugs whilst using Fusion applications or have some feedback that you think may be useful to the team, please submit a ticket on Fusion’s Zendesk!

After a challenging week for the Fusion team following the wallet hack of September 28th, it was great to get back to ‘business as usual’ and complete sprint 3.4 successfully and on time.

The team would also like to take this opportunity to thank the Foundation team in China for their 24/7 work during the Chinese holiday period to manage the aftermath of the theft and determine the best path forward.

Here are the Release Notes from the sprint 3.4 completed between Sept 30 and October 9:

New Features

  • Launched Universal Short Account Number (USAN) Swap, enabling users to trade their USAN numbers for any other digital asset using Fusion’s quantum swap feature. USANs are now selectable as a tradable asset on
  • Introduced live transaction status for all wallet functions — create asset, send asset, time lock, make, take and recall swaps.

Bug Fixes / Improvements

  • Resolve pagination issues on main swap screen.
  • Improve filtering logic on main swap screen.
  • Design overhaul of make/take swap modals to protect users from suspicious assets and ensure user experience is intuitive.
  • Added new warning note on swap modals for any swaps that contains ‘malicious assets’ i.e fake BTC, ETH.
  • Fixed price tracker API so correct price displays on all frontend applications.
  • Corrected ‘from date’ display in the ‘send transaction’ modal on MyFusionWallet which previously incorrectly displayed as (from date — 1 day).

Note: The dev team is actively working on correcting a persistent decimal rounding issue that will be resolved in the next sprint.

Fusion crafted a short survey to capture your feedback on their new MainNet functionality. They want to ensure that you have the best possible experience when interacting with their features, please take a few minutes to share your thoughts with them.

Social encounters

No updates.


Information from

Fusion Foundation Wallet Theft Update: 10/8th:

Proposed recovery solutions to stolen tokens, which transactions are honored, what is impact on token supply, what Fusion is doing to prevent future thefts and more.

Important events will be taking place in the coming days to help the Fusion Foundation and community move forward from the theft. During this period, to limit the thief from profiting, the team discourages the community from trading ERC-20 FSN on OTC/DEX and Native FSN through Quantum Swaps.

1. What are Fusion’s plans to recover the stolen funds and / or limit impact of remaining stolen funds?

Plan for ERC-20 FSN (3.5 Million Stolen, 1.978 Million left in thief accounts)


Foundation reclaims stolen tokens in thief’s account(s).


  1. Issue a new smart contract.
  2. Take token balance snapshot at block height XXXX. The exact block height XXXX will be announced at a later date.
  3. Set to zero outstanding balance of 1.978 million stolen tokens, as of time of snapshot, in thief accounts.
  4. Transfer exposure of outstanding balance of 1.978 million stolen tokens back to Foundation accounts.
  5. For non-thief accounts (that is, valid holders of ERC-20 FSN), deposit new ERC-20 FSN to accounts in 1:1 ratio. In other words, valid holders of ERC-20 FSN will not lose their token exposure.

Plan for MainNet FSN (10 Million Stolen, 3.9143 Million left in thief accounts)

There are three solutions being considered for implementation.

As the team has stated, the community has always been, and continues to be, an important part of Fusion’s project. Thus, they conduct a vote so that the community’s voice can also be considered as the team chooses the best solution. Details on the vote are here.

The Fusion community definitively supported ‘option 2’ as the preferred remediation solution to the wallet theft. 99%+ votes supported executing a ‘state change’ without restarting MainNet. The team is in the final stages of preparation and will provide instructions shortly.

Option 1 — Do Nothing


Stolen tokens remain in thief’s accounts, and can continued to be transferred or sold by thief.


None. There will be no hard fork, roll back, or transfer of funds.

Option 2 — State Change


Foundation reclaims stolen tokens in thief’s account(s).


  1. Select block height XXXX for hard fork (similar to Ethereum DAO hard fork). The exact block height XXXX will be announced at a later date.
  2. For a period of 1 week (block time) post hard fork, only buy transactions will be supported — all other types of transactions will not be allowed.
  3. All transactions related to the stolen tokens done after block height 600,000 via DEX, OTC, Quantum Swaps, and Timelocks will be rolled back.
  4. After block time of 1 week post hard fork, set to zero outstanding balance of 3.9143 Million stolen tokens in thief accounts and simultaneously transfer balance to foundation account.
  5. Resume support of all transactions.

Note: If stolen tokens are sold before first hard fork, a second hard fork will be done to deduct amount transferred to foundation account by the amount sold by thief.

Option 3 — State Change and Mainnet Restart


Foundation reclaims stolen tokens in thief’s account(s).


  1. Select block height XXXX for hard fork. The exact block height XXXX will be announced at a later date.
  2. Take balance snapshot at XXXX. The exact snapshot XXXX will be announced at a later date.
  3. Set to zero outstanding balance of 3.9143 Million stolen tokens in thief account and simultaneously transfer balance to foundation account.
  4. All transactions related to the stolen tokens done after block height 600,000 via DEX, OTC, Quantum Swaps, and Timelocks will be rolled back.
  5. Restart MainNet with balances post token recovery as genesis block.

2. What will happen to the FSN bought in centralized Exchanges post theft?

All FSN (native and ERC20) bought in centralized Exchanges are valid and will be honored. Withdrawals will be allowed once they remove the stolen tokens from the thief’s accounts(s).

3. What will happen to the stolen FSN that are still in the thief’s account(s) identified, both frozen at exchanges and those being actively monitored?

For the stolen FSN that is currently frozen at Exchange accounts, the team will work with Exchanges to return to Foundation accounts. Once recovered, Foundation will burn the tokens, thereby decreasing total supply. The exact amounts will be shared as Foundation recovers the tokens.

For the stolen FSN that is currently in the monitored non-exchange accounts, they will handle as per answer to question one.

4. What will happen to the BTC and ETH in the frozen accounts at Exchanges resulting from the thief’s sales of stolen FSN?

The team will work with the Exchanges to use the BTC/ETH to buy back FSN in the exchanges and then burn them immediately, thereby decreasing total supply of tokens.

5. What will happen to the BTC and ETH sitting in addresses identified by Fusion which the thief successfully withdrew from exchanges?

  1. Foundation will continue monitoring those addresses and update the list if/when the thief moves them
  2. Foundation will contact exchanges to freeze the thief’s account if he moves to any Exchanges
  3. Foundation will continue working with police to get back those stolen assets. Any BTC/ETH they are able to recover, they will use it to buy back FSN from market and then burn them immediately, thereby decreasing total supply of tokens.

6. What will happen to the remaining ERC-20 FSN that Foundation received from the ERC-20 to native FSN swap?

Foundation will burn all the ERC-20 FSN that it has received from token holders swapping from ERC-20 to native FSN tokens.

7. What is foundation doing to prevent this theft from occurring again?

No matter how safe the team thinks a wallet is, as continues to be shown across the industry, they must always assume it needs to be safer. Therefore:

  1. Foundation will distribute FSN into multiple cold wallets.
  2. Foundation is working with licensed custody and banks to store FSN native tokens
  3. Foundation has strengthened management process.
  4. Foundation will leverage community power and strength of Fusion network itself, which was not compromised in this theft, to enhance storage safety with time lock and DCRM technology

8. How is Foundation going to fund the stolen FSN that have been sold, which are honored as valid transactions?

The Foundation will take responsibility and use its own Reserve and Team allocation, without impacting the Community allocation.

9. Can we get more updates on authorities’ and Foundation’s efforts to apprehend the thief?

Information will be shared with public as soon as it no longer impacts the investigation. The last thing anyone wants is to compromise the investigation by sharing sensitive information and tipping off the thief.

10. Will the incident affect Fusion adoption and partnerships with governments and institutions?

Fusion has never stopped moving forward on innovation and adoption. They continue to have fruitful conversations and progress with financial institutions, both new and existing. Shortly after the funds were stolen, the team proactively informed their partners, including those recently announced, on the theft and some partners did ask for clarification. Once they learned that the security of the network was never compromised, they were comfortable continuing their engagement with Fusion and some have even offered their support. The team recognizes that there were misleading headlines published in the press, but is confident that as they continue to execute, the truth will take care of itself.

11. Will there still be 3 different types of FSN in the market in the future? (Native, ERC20, and BEP2)

Foundation will swap all of its remaining ERC-20 FSN into native FSN and they will urge all Exchanges to move to native FSN asap. The team is looking forward to phase out ERC-20 FSN in the near future. BEP2 FSN will continue to be supported, as they are firm believers of the Binance DEX.

2 Million FSN — Open Source Community Campaign:


The 2 Million FSN campaign supports a whole host of activities across various functions, including product design, article translation, programming competitions, meet-up organisation, hosting hackathons, developer conferences, staking, app development and more.

Just joining the Fusion open-source community can earn you 2000 FSN (time-locked for 3 months)! And an early bird registration reward of up to 2400 FSN (time-locked for 3 months) If you register before October 31, 24:00, Shanghai time. Additional FSN can be earned through referrals, with a 400 FSN (time-locked for 3 months) bonus if your referee registers for the campaign.

Registration campaign

To get started with registration and earn your first reward, please complete the below Google Form.

English Community form —

The Chinese community is registered through the following form:

Chinese Community Form —

The registration process is divided into three steps:

1. Fill in registration form, include all relevant information and provide a Github account number.

2. Join the relevant chat group, Chinese members join the Fusion WeChat group and English members joins the Fusion Developer group on Telegram.

3. Join the community and set up as a public member.

What activities will be included within the campaign?

Below there isa short list of example tasks that are included in the 2 Million FSN campaign, however other activities may also be eligible.

1. Content creation: content writing, editing, publishing on personal blog.

2. Designer: UX design, posters, videos, promotional materials.

3. Developers: Dapps, web pages, back-end improvements, testing and other code contributions.

4. Researcher: Research and production of technical content.

6. Translator: Content Translation.

7, Operation and maintenance management: website, server, release, etc.

8. Community Ambassadors: event organization, service support, communication.

9. Legal counsel supporters: community legal counsel support.

What can you earn?

1. Registration reward pool = 200,000 FSN +

- Register to the community and receive 2000 FSN time-locked for 3 months (early bird receives 2400 FSN time-locked for 3 months if registers before Oct 31 24:00 Shanghai time).

- Refer a friend and earn 400 FSN time-locked for 3 months.

2. Development reward pool = 800,000 FSN.

- Write a SDK and earn 60,000 FSN time-locked for a year (180,000 FSN max earning for this task, i.e 3 SDKs).

- Build a mobile wallet and earn 200,000 FSN time-locked for a year.

- Build an application using DCRM and earn 200,000 FSN time-locked for a year.

- Build a DeFi application and earn 100,000 FSN time-locked for a year.

- Create your own development proposal and earn up to 120,000 FSN time-locked for a year.

3. Miscellaneous reward pool = 500,000 FSN.

- Activities, translations, articles, design, finding bugs, etc.

4. Regional and Institutional node development reward pool = 300,000 FSN.

- Set up a regional node in your location, at your institution, university and earn time-lock tokens.

5. Allocated budget to support community events 200,000 FSNs

- Compensation for preparation time.

  • Associated operating costs required to support the event.

Audit criteria for Registration

Fake accounts and submissions will not be approved. All registration information is required to be true and valid.

1. Registered Github account requirements: Github accounts needs to be registered for more than half a year to be eligible for the reward. People registering to participate in non-technical activities like translation, design, etc can use a newly registered Github account.

2. Description of relevant skills and submission requirements: can be resume attachments, participation in Github open source projects, Linkedin address, design portfolio, previous translation experience etc.

3. Join the community requirements: Chinese members join the Fusion WeChat group and English members joins the Fusion Developer group on Telegram. Join the organization, and make sure you are a community public member.

Fusion Time-Lock Bounty Campaigns!

The team activates 6 bounty campaigns that reward community members for helping to grow their social communities and interact with their platform.

With the launch of DCRM on the horizon and the positive adoption progress, they want to see a big uptick in their capacity to spread information and grow awareness. And they need your help!

Enter Fusion’s exciting time-lock campaign! The wonderful thing about time-locked FSN is that in order to monetize them you need to learn a little a bit about what makes Fusion so special.

Today, there are three ways to monetize the front-end value of time-locked FSN.

1. Set up your own node and contribute the time-locked FSN to staking.

2. Send your time-lock FSN to one of the numerous community staking pools and earn rewards.

3. Swap your time-lock FSN for complete FSN in the quantum swap marketplace.

All of these options require basic understanding of Fusion’s time-lock concept, staking model and quantum swap feature, meaning not only can the team build the community but they can also educate new joiners.

Bounty 1: Add new joiners to the official Fusion Telegram Channel

The first bounty competition incentivises participants to invite/refer their friends to the Fusion Official Telegram Channel.

Bounty 2: Join the Fusion Twitter Bounty Campaign!

Follow Fusion’s official Twitter handle. Like and Retweet Fusion Tweets for the week.

Bounty 3: Staking Ticket Bounty

Increase the number of tickets that your node is staking and earn extra rewards.

Bounty 4: Generate a Universal Short Account Number (USAN)

We are encouraging new joiners to experience the simplicity of the USAN. A total of 700 newly created USAN owners are eligible to win rewards.

Bounty 5: Main Net Token Swap Bounty

Transition your ERC20 FSN tokens to native FSN coins on Fusion Main Net and earn rewards.

Bounty 6: Quantum Swap Bounty

The Fusion foundation is releasing an exciting swap deal in the Quantum Swap marketplace for users to take advantage of.


Fusion roadmap:


March 28th, 2019 — Payable Stage Network 2.0 Launch

June 30th, 2019 — MainNet Launch


Quantum Swap Feature Enhancements

Expansion of Asset Gateway


DCRM 5.0 Integration with MainNet

Virtual Machine Enhancements

Finance Product Development Module


H1 — Decentralized Oracle for Multi-trigger Smart Contract

H2 — Scalability Improvements

Partnerships and team members

No updates.


The information is taken from


Community Rallies Behind Fusion in the Face of Adversity:

In what have been a challenging weeks for Fusion, the team takes motivation from the way the community has steadfastly supported the project during this difficult period.

The Fusion team has been working 24/7 on how best to resolve the wallet theft of Sept 28. For now, the priority is to swiftly control the damage, work closely with the relevant law enforcement agencies and keep the relevant stakeholders updated. For the majority of employees at Fusion, they are back to business-as-usual, with their focus on building out the remainder of Fusion’s technology and progressing with their adoption roadmaps.

As was stated by a community member shortly after the Fusion wallet theft, this is hardly the first incident of a compromised wallet in the industry. There are numerous examples where projects have come back stronger after an incident of this nature.

The way the community has stood by the project is inspiring and is testament to the strength of Fusion vision. Since the Fusion token sale in Feb 2018, they have had a strong core community who they cannot thank enough for their immense contribution to the project.

The team has been particularly impressed by community members who have seen the positives in the unfortunate theft of Sept 28. They really believe that this incident will further galvanise the team and community to ensure they succeed in the future.

Despite all this support, the team is not ignorant of the theft’s impact on the community. However, the team now has two options before them: 1) continue to operate in regret or 2) to move decisively forward — learn from the theft, quickly work to restore the stolen tokens, and bring everyone’s focus back to the Fusion technology.

Social media metrics

Social media activity:

Social media dynamics:

Fusion community continues to grow slowly. Social media dynamics shows that it remains virtually unchanged.

Twitter — Official announcements channel. An average number of retweets is 30–60 for one post.

Fusion Community‏ Twitter: since October 19th, 2018. Not active since November 26th, 2018.

Fusion Announcements Telegram channel — Official announcements. About 2,5K followers.

FUSION Developers Announcements Telegram channel: Tech discussion.

Facebook (till May 2018) — Announcements, 10–15 likes, 1–2 shares. since January 20th, 2018. Discussion on PSN, latest news, price, etc.

Check out the Fusion forum.

The graph above shows the dynamics of changes in the number of Fusion Facebook likes, Reddit subscribers and Twitter followers. The information is taken from

This is not financial advice.

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