Sixth Open Letter to Iron Bank

Since 2021, there exists bad debt between Alpha Homora and Iron Bank (IB). The two protocols work through protocol-to-protocol lending mechanism, and thus it was appropriate for the issue to be resolved between the two protocols. At the time, both protocols agreed to this agreement to settle the debt. This has been the default way ever since.

Since IB froze users’ funds and demanded for accelerated payments from Alpha despite having the original agreement in place, we have discussed with users and IB via open letters and other channels and proposed a solution for accelerated payment method that users agreed to (95.62% voted For).

Therefore, if IB wants accelerated payments instead of honoring the original agreement to settle the debt, then this solution that users agreed to and voted for is the path forward. Otherwise, we can continue to honor the original agreement. However, if IB chooses to sell the collateral, which is a collateral for the whole position, then the debt between the two protocols is settled. If IB chooses to, we can work with IB on executing the solution such that IB gets the most value and as a result users get the most value.

To Alpha Homora users

Even though by IB selling the collateral means the debt between Alpha Homora and IB is settled, we will set aside a goodwill fund for users, and we can discuss details of this later on if this is the case.

Update on our effort to retrieve hacker’s funds: We are talking to people we think may have intel of the hacker. Separately, we are now connected with the Euler team and will learn and apply their strategies of getting funds back accordingly.

Some users also ask us to share more about the future roadmap. Although resolving this issue with IB is our top priority, our tech and product teams continue to build, and we’d like to take this opportunity as requested by some users to share more.

We still really believe in blockchain technology and how it can change the way we all think, work, and operate. We remain passionate in using our expertise and interest in DeFi to drive more adoption of blockchain technology. Diving further into problems in DeFi, we realize that the current money markets that rely on the interest rate model do not allow DeFi to scale further.

Because money markets are the most fundamental part of DeFi, if we can solve this problem, our expertise will contribute to enabling DeFi to scale further and blockchain technology to be more adopted. And this is exactly what we are building - a completely new model of the money market that relies on profit sharing instead of an interest rate mechanism. We believe the profit sharing mechanism will align incentives of all parties using money markets, drive for more adoption of money markets, lead to more DeFi applications that build on top of this profit sharing model, and ultimately more adoption of DeFi.