Reimburse Accidental Burned KEEP Token

Hi All,

A few minutes ago I accidentally sent 261632 KEEP tokens to the KEEP contract address (instead of another wallet like I meant to). I’m writing this today with the hopes that you can sympathize with my plight and support my reimbursement efforts.

You can see those transactions here and here

There have been countless examples of this sort of thing throughout the years where communities stepped up and helped people who’ve had issues or made costly mistakes, and I’m hoping for the understanding and support of the KEEP community to make this less of a painful experience for me.

What I’m asking for is some kind of full or partial reimbursement in the form of vesting KEEP tokens, to come out of treasury. Considering I seem to have burned 260000 of the KEEP supply, it would seem to not really have any detrimental affect to allocate a similar amount of tokens to me. And even though the tokens I burned were not vesting tokens, I think vesting would be more appropriate to ensure I remain an active and participatory community member after this experience.

I’m open to other ideas if anyone has any- whatever the community thinks is fair/appropriate. Obviously you are under no obligation to do anything, but I think it would be a great show of leadership & generosity for the KEEP community to do something to help make this experience less painful for me.

Thanks for reading this far.

Sincerest appreciation,
Tinky

Damn, I’m sorry for your loss; that’s super painful. I’ve made various mistakes with wallets and have had more liquidations staking ETH for tBTC than I expected (and others have had orders of magnitude greater losses, including from single signers not responding in time).

This seems like something the DAO should take up in the context of how much to allocate (if any) for various issues people have encountered over the life of the project - but also going forward (while avoiding moral hazard actually creating more incidents). I’d be interested in that discussion, as it raises important questions of individual contribution of various types vs. the collective goals. I can imagine some spirited debate (and creative ideas).

Hey John, thanks again for the thoughtful response. While I agree making mistakes is part of learning, in an ideal world there is some kind of resolution when something like this happens (with a large negative impact on one person, that is easily remedied by another party without much effort).

In my instance, I accidentally burned 261632 KEEP tokens, thereby permanently reducing the KEEP supply by the same amount. So if the DAO were to issue me vesting KEEP tokens, it would not really have much of a net detrimental affect (if any at all) on the overall KEEP project. But it would demonstrate the DAO’s willingness to support their users when reasonable requests are made for assistance.

I’m not sure I agree with you that the DAO should define specific responses to particular situations that have arisen or might arise in the future, but I agree that on a case-by-case basis it should absolutely be discussed.

Do you have any thoughts about my specific request, or what you’d suggest as an alternative if you’re not in favor? I know I’m asking for a lot, but any input would be greatly appreciated.

Sorry for your loss. It sucks to lose hard-earned money in this manner.

I personally am against the project team/community compensating for such an event. This goes against the philosophy of being your own bank. I have lost money multiple times in scams, hacks, and sometimes purely by just being a dumbass over the last 5 years. I take full ownership of losses just like I do for my profits.

I am very sympathetic about your loss. I know it sucks to be in this position but I think it would be bad precedent. This is my personal opinion and it’s ok if not everyone agrees.

Appreciate the response @mutedtommy. Do you not think I benefitted the project by burning some of the supply (even if it was an accident)? It seems fair to compensate me in some capacity, even if it’s not full reimbursement

I’m also sorry for your big loss! Have lost money as well, not in this particular way, but it sucks!

I’m not sure if benefitted the project is the correct wording here. You’ve reduced the supply, so it could increase the token price. But in this logic stakers - node operators, that were slashed for for whatever , also helped the project and should be compensated?

My issue with any sort of compensation of this sort is:

  1. Where are the funds coming from
  2. What are the decision factors case by case
  3. What is the capped max. For example what if it were a 100M tokens?

An important point: the DAO can not mint new KEEP tokens → Meaning it would have to come from the existing treasury. That treasury is intended for other purposes, e.g. developer grants, staker rewards, liquidity incentives, coverage pool boot-strapping etc.

So in that sense, a compensation reduces the ability for the project to execute it’s goals.

What’s your take on this @tinky

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Hey @nahuus123 thanks for providing your input.

I can’t speak to the node operators or logic stakers as I’m not familiar with their potential losses, nor have I seen a request for compensation by them.

But in terms of my request-

  1. Where are the funds coming from

I would think the DAO treasury

  1. What are the decision factors case by case

I would leave this up to the DAO. I think it’s hard to make a specific set of criteria since you can’t really imagine every potential scenario. But my guidance would be

  • does it seem like a reasonable request
  • is it small enough that it won’t have a measurable affect on the DAO
  • does it seem like that person just wants to take the money and run, or will they stick around and help the project? Offering vesting tokens is a great compromise in that regard
  1. What is the capped max. For example what if it were a 100M tokens?

It ought to be voted on (if we want to actually define specific criteria). But given that the total KEEP supply is 1,000,000,000, 1 million tokens or less is a negligible amount in the grand scheme of things. I’m not sure how much is in treasury, that would obviously affect what appears to reasonable.

Let me know what you think. I know I’m asking for a lot here, but given the magnitude of the mistake on my end and the minimal affect it would have on the DAO it seems reasonable to me. But again, not asking for full reimbursement, just whatever the community thinks is okay (if anything).

Good dialog started here. While I’m sympathetic to anyone who believes in the project and invests time and/or capital and loses funds that might be added to project goals (vs. taking gains off the table, which is also totally legitimate), I also understand those who will argue that this is a slippery slope we shouldn’t venture down. And there are historical examples in Ethereum like the 2016 DAO hack, where enough participants believed that the enormity of the taking so early in the project’s life posed serious risks to the whole endeavor - and others vehemently disagreed with altering the past.

To go down this path, I’d say we would need:

  1. A sense of stakeholders’ willingness to consider compensation for past events; perhaps a vote on the concept prior to the particulars, as we did with the merger.

  2. Our DAO in place and alignment on “budget” for all the initiatives the project needs.

  3. A discussion of and alignment on guiding principles for compensating for losses; and then a clear process and cadence for doing so. It’s not only unworkable to be done on a one-off basis, we also need to carefully consider how compensation would impact people’s future actions (moral hazard). I’d also add that there’s only so much bandwidth stakeholders have, and we need to first get that focused on the mission-critical strategy and execution.

Another good point I heard someone make: given the merge with NuCypher, it’s not just Keep history and community now that we have to take into account. A lot to consider, but good that we are doing so in a constructive way.

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We can give you a special role on the Discord that states you’re generous and burnt tokens to assist in making KEEP a deflationary asset, but i do not think the dao paying it back is a good idea. If anything, we could start a community driven donation to try to make you whole, but not from dao funds.

Hey @john_packel,

Do you have any specific thoughts in terms of your 3 points? I think it’s important to define those as well but I’m not really sure where to start.

Thanks,
Tinky

@pantsme I appreciate the sentiment. I’m not really optimistic that anyone would actually donate, so while that’s a nice idea I don’t see it actually having any impact.

And I’m not really interested in a special “discord” tag, that has no monetary value and doesn’t do anything to make up for what happened. Thanks for responding either way.

@tinky unfortunately there is not enough support for this proposal to move it to an official community multisig vote. However, you are welcome to submit another proposal to the upcoming Threshold DAO when it launches. At that point the community will own a treasury and there will be a more clear source of funds to issue a reimbursement. Also worth noting again that you are not the only person who has accidentally sent funds to the token contract and no reimbursement has been made in the past. This issue is being addressed with the new T token contract.

@Will I’m the one who has sent BY FAR the most to the contract. It has 274365 KEEP in it. Out of that, 261632 came from me (95.3% of it).

Where is the statement “there is not enough support for this proposal to move it to an official community multisig vote” coming from?

The statement comes from the responses on this thread and conversations with other community members who’s opinions are not directly represented here.

I understand this is unfortunate. However, the best option for you is to bring this up again as a Threshold DAO proposal. One of the core issues here is there is no clear source of community funds for the reimbursement to be issued from at the moment. It isn’t fair for this to come from stakedrop funds because that incurs direct loss to others for a mistake you made.

You should also know that we do have a community grant program. Do you have any ideas outside of tx reverts for how this issue can be avoided in the future? The community might decide that is a great grant opportunity and award you some KEEP to make it happen.

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Hi Will-

Just wanted to follow up on this. I noticed a similar issue that was brought up on Compound forums, and they voted to return the funds to the sender.

They added a sweep function to their contract and every 6 months they return any eligible funds to the sender (while assessing 10% penalty to the sender). Is there a reason that something like that could not be done by KEEP?

Thanks,
Toby

Hi, @tinky. Thanks for sharing this; it was good to read through the comments.

I noted this one from Robert Leshner (Compound founder): “We just have to make sure the community (and governance) have a clear process for when/how governance retrieves trapped assets, since it can be relatively onerous.”

This is similar to what I’ve argued above, that in order to do this we’d need 1) buy-in from stakeholders on compensation for past events, 2) DAO with alignment on budget for all initiatives, not just this, and 3) alignment on principles and process.

While this may take longer than you’d like (and I can understand that), the good news is that both project development and alignment on governance continues to make solid progress.

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Indeed. The contract isn’t upgradeable, so the funds are stuck there.

The new T DAO can include sweep functions. It can also include the power to mint more tokens. Unfortunately, most Keep network contracts don’t have a way to add sweeps or any upgraded functionality at all… so those funds would need to come from someone’s pocket. And as a fixed-supply token without a DAO treasury today, that means it needs to come from a token holder.

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Hi Matt-

Is there an actual solution you’re suggesting / proposing here? Just saying “sorry, your funds are gone” and the team isn’t going to do anything about it isn’t going to work for me. I need to be able to see some potential path to addressing this issue or I’ll have to look into other options, and they’re not going to be pleasant for the Keep team or myself.

This isn’t a veiled threat or something like that, I’m just stating a fact: if we can’t come to some kind of resolution or figure out some kind of reimbursement I will take legal action to recover what belongs to me. I’m sure the crypto world would be very curious to watch a potential case like this and see what the outcome is, and it would cost a good amount of money to defend, even if you think there’s no liability on your end.

If you take an instance where a bank accidentally deposits money into your account, and you weren’t supposed to have it, you’d be legally obligated to return it (or they would take it back). This is slightly different, given that you’re saying your team don’t have any way to return the funds, but the fact of the matter is that the Keep team (and the contract you deployed / own / maintain) have my tokens. I need them back, or I need to be reimbursed in some other manner.

I’ve been pretty patient, in the hopes that someone would propose a solution or have an idea that makes sense, but so far I’ve seen nothing.

I’m going to give it a couple more weeks and then begin to take action on my end if no solutions have materialized.

Interesting. It certainly sounds like a threat.

I’d suggest you spend some time reflecting on what you’re doing in this space. If it’s not clear how broken that analogy is, we can make it clear via a simple experiment.

Try sending money to the 0x0 address in Ethereum. Ideally a small amount that you’re comfortable losing.

Once you do, see if you can get Vitalik or the EF to send you a refund. I think you’ll find that it doesn’t matter what you write or say. The cryptography and the immutable nature of the chain prevent those people from refunding that mistake. That’s the entire premise of a blockchain system. Your funds are lost, irrevocably.

So, back to your issue today. No one has power over that contract, except perhaps Ethereum full node operators. You are one of the few to make this particular mistake. You can read the contract to convince yourself that no one has that power, or pay an auditor or other technician you trust to confirm it.

These systems have sharp edges, and they aren’t for people who expect they will be “taken care of” by “someone else”. You were free to make a poor decision, and unfortunately, you are suffering the consequences. If anyone else helps out here, it’s because they are being charitable — not because they owe you anything.

This is such a tremendous misstatement that I’m struggling to accept you wrote it in good faith. I do not own the KEEP token contract, I maintain no power to upgrade that contract, and I have certainly never taken custody of your funds of entered into any related agreement, either personally, or in any professional capacity. Neither me nor the Keep team have your tokens, and if we had that power, it would be noted in one of our numerous audits.

The sooner you accept that, the sooner you can either find a way to convince the incoming T DAO of the merits of your particular case, or follow my own personal recommendation… and work to earn it back. Many of us have suffered similar losses in this space, and learning to accept the consequences of your own actions means you can get back at it.

I understand that you lost money, and despite the threats, I feel bad for you. But if you’re going to threaten me, this will be the last conversation we have directly. You’re welcome to reach out to my lawyer.

Good luck.

You’re taking my previous message as a personal attack- it’s not. It’s directed to the Keep team as a whole. I’m looking for solutions and you’re providing nothing.

If you’d really rather I go the legal route, so be it. But I’d suggest that the team think about your appetite and budget to defend a lawsuit, and try to use that budget to resolve the situation now before it gets out of hand (instead of fighting it later). I am completely willing to compromise if it saves all of us time and energy.

I 100% will go the legal route if necessary, so please don’t misunderstand me offering to compromise. At this point it’s approximately $200000 worth of KEEP that the contract your team deployed is in possession of, so you can clearly see why it’s worth pursuing from my end (though I’m not sure why it’s worthwhile to fight rather than to compromise from yours).

I’d prefer not to which is why I reached out at all, but if you/the team don’t want to work together to find a reasonable middle ground that’s your choice.