R1 is currently failing the community.
Questions need to be answered and changes must be made in how R1 and the Exchange are operated.
R1 just had another poorly executed exchange round where the entirety of funds were instantly drained with very few community members being able to participate. For anyone who hasn’t been following, this means that both “parts” of Round 7 were insta-drained. This is in addition to several earlier Rounds that were insta-drained as well. It has become a constant problem with R1 and its Exchange.
The community has been asking for a permanent solution for months.
@HoundOne_Validator - a recently added R1 team member - has even voiced their concern about this prior to joining the R1 team. R1 has said many times they are listening and working on a solution, yet R1 has so far failed to deliver.
However, I’m not certain R1 team members @mbarret3 and @hashmesan even care that the funds are being instantly drained.
Their most recent advice was to basically “Wait by your computer and when we say ‘Go’, may the fastest wallet win!”
(NOTE for above tweet: R1 funded the exchange an hour late. They had said 6pm EST, but it wasn’t opened until 7pm EST.
R1 did not provide any update from their twitter account as to why there was a delay or when the exchange would actually open. So how could anyone “be prepared”?
NOTE for above two tweets: I included tweets from Recovery Validator, too, because R1’s Matt is the operator of the validator.
What kind of plan is that? This isn’t a video game. Why is R1 not mitigating the need for such actions by the community?
“Ready your trigger finger.” “Wait minute by minute” for launch. If you weren’t able to swap it’s because you “weren’t ready” and maybe next time you’ll “be prepared.” The only way you can exchange is if you “transact as soon as the contract is funded”?
Why is R1 making it harder for community members to exchange and not easier? How is R1’s current “plan” what’s best for the community’s ability to partake in reimbursement/R1? It doesn’t give a fair opportunity to people at work or asleep (there are people from all over the world who are a part of the Harmony community). Quite literally it allowed almost nobody to participate at all! Just 20 wallets were able to exchange in Round 7 part 2 (but 14 of those 20 wallets were controlled by just 4 users: MORE ON THAT FARTHER BELOW).
There’s also another problem: R1 refuses to put the burning smart contract on github.
I’ve personally contacted Hound validator on multiple occasions to ask when the contract will be available. He has said each time that he will ask the rest of the R1 team/Quoc. But there has been no progress on this. The community is still waiting. Can we get an answer from the R1 team?!
How can Harmony agree to fund R1 without the contract being available to the public?
Since the R1 team seems pleased with how Round 7 went, I’d like them to answer a few questions:
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How many of the 20 wallets that were able to exchange held 1tokens at the time of the bridge exploit?
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How many total wallets held 1tokens at the time of the bridge exploit?
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How many of the 20 wallets that were able to exchange voted on the R1 governance proposal using the rONE token?
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How many total wallets voted on the R1 governance proposal using the rONE token?
I hope you can see where I’m going with those questions… These are the users who should be the audience of the R1 Exchange, so are they the ones actually able to use it? What data does R1 have on their participation rate?
The R1 exchange is being instantly drained.
The R1 twitter account posted at 7:00pm EST that the exchange was funded:
But at 6:59pm EST, thirteen (13) burn tx of the 27 total tx had already taken place:
R1 contract address: 0x56ff8BE962d531f5f1a5bDed45c6B61e11D18fC6.
Only 20 wallets being able to participate is not an achievement.
Here are a couple facts about the 20 “unique” wallets:
1. Seven of the 20 wallets were created in April (first tx made between April 15-19).
Logically, they were created by users in order to bypass the $1,000 per wallet limit. This wouldn’t have been a problem if R1 had implemented a “whitelist” like had been done successfully for several prior Rounds. [Unknown if Quoc tweeting on April 18 that R1 won’t be using a whitelist had an affect: 3 of the 7 wallets were created after his tweet.]
2. Four users accounted for 14 (70%) of the wallets used.
There were 4 “clusters” of wallets that each had previously interacted with the others in the cluster. Four people drained the majority of the funds. Again, this was clearly done to circumvent the $1,000 per wallet limit. And again, a whitelist easily prevents this.
The Four Clusters:
4 groups of wallets with a connected tx history who participated in the insta-drain on the R1 exchange
Cluster 1
Burn tx:
Tx connecting the 4 wallets:
Cluster 2
Burn tx:
Tx connecting the 4 wallets:
Cluster 3
Burn tx:
Tx connecting the 3 wallets:
Cluster 4
Burn tx:
Tx connecting the 4 wallets:
Question: Why did R1 not conduct this basic analysis of Round 7?
Possible Solutions/Improvements to the R1 Exchange:
Let’s make this simple.
(1) Enact a whitelist.
All wallets who held 1tokens at the time of the hack are included. They are the victims who need to be reimbursed (reimbursement was the impetus behind Harmony’s recovery plans/discussions). But currently they can hardly even participate. It is absolutely necessary to reimburse the victims.
All wallets who voted on R1 governance using rONE tokens are included. These are the people who actively engaged with R1 and the recovery process. Without their support, it’s possible R1 would’ve never been approved by Harmony.
No other wallets should be on the whitelist.
A whitelist has been the ONLY way to prevent the R1 exchange from being instantly drained. The changes R1 made in both parts of Round 7 failed to prevent an insta-drain. So let’s do something that we know works!
(2) Reduce the per wallet limit and exchange rate to allow more people to participate.
Funding from Harmony is limited. And it may remain limited for the foreseeable future. Try to benefit as many users/community members as possible. Do not celebrate only serving 20 “wallets” in a Round. Do not force users to play a “fastest finger” game in order to receive their funds.
Example 1: Instead of a $1,000 limit per wallet, perhaps reduce it to $250 or $500. This would allow for up to 4 times as many participants.
Example 2: Instead of offering an exchange rate of 0.08 when the market rate is around .065 (a 23% markup), perhaps offer .0725 (an 11.5% markup).
(3) Adjust 1 and 2 as necessary, but ONLY with community engagement. The R1 team should not be unilaterally making these decisions like they did in both parts of Round 7.
Poll Questions:
1. Should R1 implement a whitelist for pre-hack 1token holders and rONE voters?
- Yes, implement a whitelist for pre-hack 1token holders and rONE voters
- Implement a whitelist for pre-hack 1token holders only
- Implement a whitelist for rONE voters only
- No, do not implement a whitelist
0 voters
2. Should R1 reduce the exchange rate and per wallet limit in order to allow as many holders/community members as possible to participate?
- Yes, reduce the exchange rate and per wallet limit
- Reduce the exchange rate only
- Reduce the per wallet limit only
- No, do not reduce the exchange rate or per wallet limit
0 voters