Malt Reimbursement Plan

Thank you to everyone who has shown us love and support over the past week while we have had our heads down — we hear you, we appreciate it, and we know how difficult this has been for all of you.

We promised you a reimbursement plan and today we are sharing that plan with the Malt community. We calculated the cost basis of everyone directly affected by the unbonding bugs in Malt V1. After a lot of reworking and manual checking we have arrived at the final cumulative cost basis of everyone involved.

Total cost basis of everyone affected: $17,953,281.66

Total funds available to us: $13,862,106.51 (polygon scan)

The full list of accounts entitled to reimbursement under our plan and the amount we calculated their cost basis to be can be seen here. The data is signed with 0xScotch’s key (0CB1 04F1 2ECF 0CB0 60C4 AEB4 A376 9956 28FD 6D79) to ensure its authenticity.

Note that this is your cost basis, NOT the amount of your potential reimbursement under the plan. If you have any concerns about these calculations you can contact us on Discord or Telegram and our team will respond as soon as possible.

Unfortunately, as you can see from the numbers above, we do not have enough available to cover 100% of everyone’s cost basis. So to that, here is our plan.

The plan

• To everyone on the list, we will transfer approximately 74% of their cost basis in DAI (this will happen on Thursday at 5pm UTC to give people time to check and query our calculations).
• Everyone that receives a reimbursement under this plan will be automatically added to a V2 whitelist. More information regarding this will be given closer to the V2 launch.

The Calculations

Here is a quick overview of how the calculations were carried out and the assumptions we made along the way.

The core actions that affected the cost basis are:

• Buying Malt (value spent on Malt is added to cost basis).
• Selling Malt (value received from selling Malt is subtracted from cost basis).
• Adding liquidity (the DAI half adds to cost basis)
• Removing liquidity (the DAI half subtracts from cost basis).
• Withdrawing rewards (DAI received subtracts from cost basis).
• Committing to the arbitrage auctions (DAI used to buy Arbitrage tokens adds to cost basis).

In short, our calculation was:

Bought Malt — Sold Malt + Added Liquidity — Removed Liquidity — Withdrawn Rewards + Committed DAI in ARB auctions = Baseline for Repayment.

Additionally, we treated transfers as a sale at the current market price at that time (defined by the last trade that happened on the Quickswap MALT/DAI pair before the transfer in question).

• Malt transfers — considered as a sale at the same price as the last Quickswap Malt/DAI trade before the transfer (including intra-block price changes).
• LP transfers — the ratio of Malt to DAI is taken from the most recent configuration of reserves in the Quickswap pool. The DAI value + the Malt value given by the same pool configuration are used to determine the price of the LP.

Making this assumption about transfers means that if you transferred Malt or LP to another address that you control, then your global cost basis will net out to be the same.

Adamant

Adamant integrated an auto-compounding vault for Malt less than 24 hours after we launched. They did so unilaterally, without any advance notice to us or any communication during or after Malt V1 failed — which is still true as of this writing apart from them sending us a list of the accounts that used the vault. At about 8pm UTC on 10th June, shortly after we became aware of Adamant, we posted on Discord and Telegram “Just for transparency we are not in any way affiliated with Adamant so use at your own risk. We do not recommend using them as your funds may be at risk”. Users who deposited onto Adamant have had to be treated differently than direct Malt depositors for various reasons, which we outline below.

If we simply applied the same analysis explained above (about transfers being considered as a sale), all deposits to Adamant would have to be considered as a sale of LP to Adamant, and all withdrawals from Adamant considered as selling back LP to the user.

This calculation would result in Adamant profiting on Malt by over $1.1 million and would therefore mean Adamant are not eligible for reimbursement, as they net profited from Malt. This would result in blanket excluding all users’ LP in Adamant from the reimbursement plan. However, there are still users who joined Adamant later on and were not in for long enough to make any profit.

Leaving Adamant users potentially without any reimbursement at all was not something the Malt team would allow. Despite our warnings about Adamant, we find the above result to be in direct conflict with our strong desire to reimburse the Malt community as much as possible. To that end, we will handle Adamant depositors such that their cost basis is consistent with direct Malt depositors.

To do this we:

• Treated LP transfers to the Adamant vault in the same way as bonding directly to Malt; and
• Treated LP transfers out of the vault in the same way as unbonding directly from Malt.

This change comprises $1.5 million of our reimbursement burden, however, we strongly believe it is the right thing to do for our community.

If you have lost / compromised your private key / seed phrase

Some of you contacted us due to having lost / compromised your private key / seed phrase. If you are one of these individuals and would like your reimbursement to be paid to a different wallet address then you will have to contact us directly on Discord or Telegram.

In this situation you will need to be able to prove your ownership of the compromised wallet by signing a message with that wallet, or by sending a transaction from it with your new address in the data of the transaction.

If such proof can be provided then we will be able to update the address used to pay out the reimbursement.

Again, thank you for your continued support, constant messages of encouragement, and most importantly, your patience during this time. This has all been very difficult for all of you and we tried to focus on getting you the best information as quickly as possible. We here at Malt are looking forward to focusing all of our energy on building the best possible V2 we can. We already have some very exciting ideas for V2 and we can’t wait to share them with everyone once we have closed this final chapter of V1.

Stay tuned, please follow us on Twitter and join our Discord / Telegram for all updates, and be well.

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Twitter:
https://twitter.com/MaltProtocol

Telegram:
https://t.me/maltprotocol

Discord:
https://discord.gg/malt