Fourth Open Letter to Alpha Community

Since the Third Open Letter, we have proposed multiple solutions to Iron Bank directly to return users’ funds, but haven’t been able to come to a complete resolution. While Iron Bank has returned some parts of users’ deposits (on non-Ethereum chains), they still take control of users’ deposits on Ethereum.

We believe the best way forward is for our community to agree upon the plan to negotiate with Iron Bank to return Alpha Homara’s user deposits. This step is being done in public so we can move forward together as a community.

We propose the following plan, which should maximize value for Alpha Homora V2 depositors while being fair to Iron Bank's users at the same time.

1. Iron Bank to pause interest accruing immediately
2. Iron Bank to return the total excess ($8,686,364.33)*, which unequivocally belongs to Alpha Homora depositors, back to Alpha in 2 parts:

     a) Iron Bank to return the outstanding excess ($5,326,879.99), as calculated below, back to Alpha by March 14th, 6AM (UTC).

             i) As of current, total liquidity in Iron Bank excluding bad debt = $57,452,881.48 - $30,689,988.09 = $26,762,893.39

             ii) As of current, non-Alpha’s total deposit = $18,076,529.06

             iii) As of current, Alpha’s current borrow = $3,359,484.34

             iv) So, the outstanding excess value = (i) - (ii) - (iii) = $5,326,879.99

     b) Iron Bank to redirect any repayments from Alpha Homora positions from iii) ($3,359,484.34) back to Alpha within 3 days after each repayment is made.

3.   Iron Bank to return Alpha’s collateral (63,000,000 ALPHA) as Iron Bank will no longer have debt with Alpha Homora.

4.   We will work with Alpha depositors to settle the bad debt amount and make depositors whole as much as possible. Once we pass the first three parts, we will propose some possible solutions so we, as a community, can decide the best option together.

Most importantly, this means the bad debt will be transferred from between the two protocols to one between Alpha Homora and its depositors. We will then discuss the recovery plan together after the negotiation with Iron Bank is completed.

While we completely disagree with Iron Bank freezing Alpha Homora's user funds, this plan is made in good faith to resolve protocol's debt in the way that minimizes each party's losses. This solution here is far from ideal as we're unable to immediately make everyone whole (because the fund lost is held by the hacker). Nevertheless, we believe this middle ground is a good potential solution toward unfreezing Alpha Homora’s user fund as soon as possible.

We would love to kickstart the discussion around this plan on Discord and start the voting within 48 hours for the community to decide the path forward that Alpha Homora depositors collectively agree to pursue.

Separately, we encourage leverage users on Alpha Homora v2 to close the positions IMMEDIATELY to minimize your risks and to make resolving process simpler.

We will be available and active on Discord. If any user has any questions or suggestions, please let us know.

*The numbers are as of March 9th, 11:08AM (UTC). The actual numbers will need to be adjusted upon execution.