Second Open Letter to Iron Bank

Context

On March 1st, round 8:20PM UTC+7, Iron Financial institution, which is a protocol spin off from the workforce behind C.R.E.A.M., made a config change of their protocol. This variation is unilateral with out discover and now prevents lenders from withdrawing their liquidity. The Alpha workforce and group are very involved and issued the primary Open Letter, which will be discovered right here.

After issuing the primary Open Letter, now we have continued to achieve out to Iron Financial institution to get on a name to debate an answer together with how debt will likely be paid off, what to do with collateral, and the way everybody will likely be made entire. They rejected having a name and requested us to share the proposed resolution on Telegram.

Nonetheless, in line with our lawyer’s recommendation, any proposed resolution shouldn’t be in writing till it’s a resolution that each protocols conform to because the debt problem is between the 2 protocols and since Iron Financial institution selected to misappropriate customers’ funds and harm lenders. And because of their motion, we don’t know what damaging factor they’d do that might hurt much more events based mostly on our writing that may be a resolution not but agreed upon. Solely after discussing, then we’re in a position to come to any settlement that may be translated to writing a closing model. That is the motion suggested by our lawyer, and we began looking for authorized recommendation since Iron Financial institution froze customers’ funds unilaterally as a result of we take this case very critically.

Response to Iron Financial institution’s First Open Letter

That is Iron Financial institution’s Open Letter. Iron Financial institution’s request to have all of the debt reimbursement be transferred by March fifth is invalid and unjustified as a result of each protocols have agreed to phrases since 2021 that debt will likely be paid down utilizing 20% of Alpha Homora’s protocol charges. There was no particular timeline agreed within the authentic settlement, and it’s unjustified to easily change the phrases. This shared understanding can be public on the good contract right here.

Furthermore, each time Iron Financial institution raised a priority relating to collateral, it was a dialogue to brainstorm for an answer that we each later agree upon as a substitute of outright requesting us to top-up collateral inside 3 days. Subsequently, the 3-day interval requirement within the authentic settlement to high up collateral was by no means enacted.

Particularly, the agreed resolution to the primary time Iron Financial institution raised a priority was so as to add extra collateral, which we did.The agreed resolution to the second time Iron Financial institution raised a priority was to rebalance the debt.On 14 Feb 2023, Iron Financial institution requested us to provide you with an answer once they raised a priority the third time, which we agreed to and requested for time to determine. Additionally they agreed to the subsequent step that we take time to determine. We didn’t talk about what number of days Alpha needed to provide you with an answer. It took us 14 days to determine a possible resolution, after which we reached out to Iron Financial institution instantly.

Path Ahead

Iron Financial institution has breached the unique settlement because the second they froze customers’ funds. Within the authentic settlement, we agreed that if collateral was not topped up inside 3 days of Iron Financial institution’s request, Iron Financial institution reserves the suitable to liquidate a portion of the escrowed ALPHA to repay the debt. Nonetheless, Iron Financial institution selected to freeze customers’ funds as a substitute.

As a result of Iron Financial institution breached the settlement and now we utterly misplaced belief in them, there’s restricted cause for us to proceed upholding the unique settlement. Subsequently, if each events can’t come to a brand new settlement or Iron Financial institution continues to withhold customers’ funds, we are going to neither proceed to switch 20% of protocol charges to repay the debt nor will high up any collateral.

This 2nd Open Letter would be the final try that we ask Iron Financial institution to debate a possible resolution with us on a name, an answer together with how debt will likely be paid off, what to do with collateral, and the way everybody will likely be made entire.

If Iron Financial institution doesn’t return customers’ funds or doesn’t talk about a possible resolution with us by March fifth 23.00 UTC, we are going to do 2 issues.

We’ll pursue authorized motion to assist our customers since we’re conscious of one in every of Iron Financial institution workforce members’ identities.We’ll take accountability. Inside 1 week, if this situation have been to happen, we are going to share particulars of how we are going to deal with and even take in the price on behalf of customers

Closing Ideas

We’re additionally a sufferer of the exploit, and the funds aren’t with us. Nonetheless, we take accountability in fixing the issue in a approach that it needs to be – between the 2 protocols. No matter considerations Iron Financial institution has doesn’t entitle it to take person deposits. We’ll proceed to push ahead such that Iron Financial institution takes corrective motion to return the lenders’ funds.