RariCapital

Summary To determine the path forward in how we reimburse users who lost their ETH during last weeks hack.

Background https://forums.rari.capital/d/77-protocol-reimbursement-plans/

Abstract Below are the following options for reimbursement ( a follow up vote will be used to determine the exact variables of the chosen strategy ):

1 - Plain RGT 2 - Traditional bonds 3 - Convertible bonds 4 - Options 5 - Pass the stick 6 - Combination

All of the actions above do not involve a sale of any $RGT from the DAO.

Additionally, where it is possible we will airdrop the asset into the REPT asset. This means that you aren’t receiving an airdrop, if you own REPT, you still own your REPT-just the composition of the asset is changing (to potentially include one of the solutions outlined below). If you were proactive and redeemed your REPT, then you will receive an airdrop of REPT.

1 - Plain RGT Take X amount of $RGT and distribute it to help make the users who lost money whole again. Governance can later determine vesting lengths and amounts.

2 - Traditional Bonds This would be creating a new asset, rariBONDS, that will be delivered to the REPT holders who lost capital. These bonds would be paid off by the DAO as its revenues increase. Users who receive the rariBONDS can either hold them until maturity or they can sell them using the YieldSpace developed by the Yield Protocol (an AMM built for trading assets like this). These are zero coupon bonds. Governance can later determine the length of these bonds and if we want multiple of them. Governance can also explore liquidity mining the YieldSpace to ensure it is liquid for users who potentially want to sell their rariBONDS before maturity. The Yield Protocol team is ready to move forward on this, right away.

3 - Convertible Bonds This is pretty much the same as the previous solution, however, it would implement convertibility. What does that mean? Essentially we can offer a specified amount of $RGT per bond as an alternative to the redemption at maturity. This could potentially work as an option and would be an attractive option for users who think $RGT would appreciate in value while also offering ETH to the users. We could again liquidity mine the YieldSpace AMM as described in the solution above to make sure these assets are liquid. The YieldSpace AMM isn’t set up to work if the $RGT were to rise beyond the value lost, however, liquidity would likely migrate to Uniswap or a similar DEX. Governance can explore the amount of $RGT airdropped if a conversion event takes place on the bond, in addition to all the parameters of a traditional bond. We could also add convertibility down the line if governance chooses.

4 - Options This is likely most similar to the plain RGT option. We would let users choose different options that have various different strike prices and different lengths. It is likely that the closer to the length, the higher the strike price would be. This could be one of the least capital intensive options as not all of the options may be exercised (but that is also a potentially bad ux for users). We could structure these options pretty easily using the Auctus protocol. Governance would later choose all of the aforementioned parameters.

5 - Pass the Stick Community member, Ben, has taken the lead on potentially developing a community multi-sig. This would be an additional DAO in addition to the one that is currently running. This option would delegate X $RGT (X=decided by governance later) to this multi-sig who is able to negotiate deals on the protocols behalf. Ben has already gotten 0xMaki, Anthony Sassano, Mariano.eth, CMS Holdings, Darren and Daryl Lau and Ric Burton on the multi-sig.

6 - Combination

• Distribute RGT to each holder (vested across 3 months), up to 20 ETH. This will instantly make whole about 722 out of the 757 $REPT holders (that is 95% of users who are instantly reimbursed!) who lost money (this doesn’t account for users who have withdrawn but you can use this to get a picture of the user profiles: https://etherscan.io/token/0xcda4770d65b4211364cb870ad6be19e7ef1d65f4#balances).
• Additionally, these potentially smaller holders will not have to deal with the complexity (and the gas costs) of products like the bonds Distribute rariBONDS (traditional bonds, that we liquidity mine) to each holder for their REPT balance - 20 ETH (if it’s a positive number). This means that there will likely be about only 35 users who have to deal with these bond products. These users will have full flexibility on what they would like to do with their bonds (sell, hold till maturity, etc).

Motivation To reimburse REPT holders who lost capital during the hack.