The project is still trying to regain the trust of its community after receiving backlash for its initial efforts.
The Revised 4BELT Compensation Plan
On May 29th, Belt Finance was the victim of a flash loan exploit. Two days later, the team officially released their first compensation plan for users affected by the exploit. After the initial plan received backlash from their community, Belt posted a revised effort on their Medium page on June 8th.
Like the initial plan, Belt aims to take a more reactive approach to loss compensation for victims of the exploit. The plan focuses on protection of the BELT token value, division of yields between different pools, and gradual rebuilding of the protocol for full service and productivity. Below is the breakdown of the revised compensation plans.
BELT Buyback Fund
The team initially introduced the buyback plan with their first compensation proposal. The goal of the buyback is protecting the BELT token value as the compensation commences. Without a buyback plan, there would be little incentive for users to continue to hold the token. This could lead to a drastic price correction if the buyback recipients all dumped their compensation at once. If a token gets hit by more sell pressure than buy pressure, the value often reduces far more drastically than anticipated.
For this reason, the team will keep the initial planned $3 Million buyback funds. Part of the funds will be sourced from the PancakeSwap IFO. The buyback plan will help to counteract the impending sell pressure. The details of the buyback program are as follows:
Buyback frequency: 2 times every day at random intervals (60 times per month)
Start date: Announced separately
Buyback fund size: $3 million USD
Future: More funding added over time as needed
The Liquidity Pool (LP) for 4BELT-r4BELT has been canceled. The team cited in their Medium post that the division of yields among new and established users was a key factor in this decision. There will not be a separate pool for r4BELT under the revised compensation plan. The collection pool was redesigned to keep 4Belt as profitable as it has always been, with r4BELT holders able to further optimize their 4Belt yields replacing the LP.
4BELT:r4BELT Ratio and Compensation
According to the team, liquidity mining with r4BELT will be activated for either r4BELT or 4BELT based on whichever has a lower balance. For example, if you have a lower amount of 4Belt than the r4BELTyou receive, you will receive the boost for the amount of 4BELT you have. This is a conditional compensation plan – the target is not to lock in user funds but to correctly target and compensate loyal customers of the protocol.
Those who were previously using 4BELT tokens will not be significantly affected in terms of BELT rewards, since their 4BELT tokens will generate close to the same amount of BELT rewards as previously. The only difference now will be that their r4Belt tokens will be generating additional yield to compensate for losses incurred.
More details of the plan as regards the emission rate is detailed in the revised compensation plan.
The New Mining Distribution Breakdown for Belt Finance on BSC
The revised emission distribution slightly reduces rates across the board, but adds a 20% allocation to r4BELT with 4BELT as part of the compensation package.
Name : Belt.fi remedy 4BELT
Total Supply: 724,177,567
Snapshot Block: the block immediately following the last attack (block 7839266)
Total 4Belt LP supply at snapshot: 721918636.181612831483029239
beltBUSD supply at snapshot (apart from 4BELT contracts) : 477995.84
For each affected 4BELT LP, one r4BELT will be minted and distributed proportionally
For each affected beltBUSD, 4.7258346838 r4BELT will be minted and distributed proportionally
Total supply of r4BELT = 721918636.181612831483029239 + 2258929.320801866 =724,177,565.5024147
To receive r4BELT, users must have held at least one 4BELT LP token (either held or staked) or one beltBUSD (either held or staked) at BSC block #7839266.
Compensation Across Other Platforms
According to both the initial and revised compensation plan, it will be entirely up to other yield optimizer platforms on how they would compensate BELT users affected by the exploit. However, Belt Finance has assured that every user on the platforms they know about and are in contact with will have r4BELT tokens airdropped to them. More details are available in the revised compensation blog post.
Schedule of Distribution
June 18 – r4BELT will be distributed to affected users (These will be sent directly to wallets. Users may need to manually add the r4BELT token to their wallet to see the distribution.)
June 24 – Mining rate distribution will begin for r4BELT holders who hold 4BELT tokens with a balance exceeding their r4BELT balance.
Judging by the response to the Tweet detailing the compensation plan, the community response has been critical of the platform’s decision. Many users have hinted that the revised plan barely differentiates from the original released plan. Other users expressed disbelief at being asked to supply more liquidity to the platform after having incurred losses from the exploit.
Whatever the decision of the affected community members and protocol team, it must be a priority that this situation gets resolved in a win-win situation for everyone. Belt has taken the approach of protecting their protocol while trying to provide a compensation package, which has caused consternation amongst those affected by the exploit. Only time will tell if their hesitance to directly compensate users will be enough to regain the trust of the community.
Source : bsc.news
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