CP90: Recovery of lost CFG tokens

[Rhano]

Thank you for your input @ltfschoen!

@ltfschoen

I think the due diligence procedure that is followed in this proposal should also be standardised and published publicly on IPFS or similar, and with a link to it included in a new standard procedures section in the governance process section of the Centrifuge website.

You are making some good points here. All Centrifuge proposals (CPs) are already submitted to our proposal repository on GitHub which serves more or less the same purpose as IPFS - once submitted there, a proposal cannot be altered. Whether there is a need for a specific governance process for these type of situations is an interesting thought and would probably merit its own topic/discussion here on the forum.

It would have been great if you had been on the governance call and contributed to the discussion as you seem like a person who does his due diligence. Feel free to join the next one in March!

[ImdioR]

Good day, Community.

Based on the received Centrifuge Dev’s feedback about the best implementation of this proposal on-chain the text proposal should be changed.

@stefan these are the changes as follows:

Changes:

• Change Burn to SetBalance
  SetBalance 10,000,000,000,000,000 ( 0.01 CFG ) tokens on lost hardware wallet 4gResb8JcTKHgm99XHTcfeXKzYwsL7kyaPQJzqtfK53ZHdy2

• Change Mint to Setbalance
  Setbalance 1,123,090,000,000,000,000,000,000 ( 1,123,090 ) CFG tokens on a new wallet address 4gKHDr9DkLz2GDbYTfZME174Q8CLoDpbgW9iXykiuHXba4Pv

Unchanged:

• Increase vesting schedule lock by 360 days ( total period of lock 1090 days ). Starting vesting block 161,613 will remain unchanged.

Please note, that the wallet address, the total amount, starting vesting block will remain unchanged.

The first message will be updated in accordance with the described changes.

[ImdioR]

Update 2024-03-07:

The proposal was submitted on-chain by @stefan via Democracy proposal. All CFG token holders can vote on this proposal from 20:05 CET on 9 March 2024.

• Link to the proposal on Github
• Link to the proposal on Subsquare: CP90: Recovery of lost CFG tokens

Pre-Image: 0x634c787ba6a38898dcb27bf0c8e85a1d05a4c73ffc8efd863313f1aa85f6dbe8

IPFS: QmQ4iDRTQHjYJkGFqqtdCNaRGvRYBBPZWdxTVBMqhPZyxN

[ImdioR]

Good day Community
Democracy Proposal 4 has become a public referendum (Referendum 47) that all CFG token holders can vote on.

This proposal is about:

• Burn tokens on an inaccessible wallet address and mint the same amount of tokens on a new wallet address while increasing the vesting schedule lock

Hash: 0x634c787ba6a38898dcb27bf0c8e85a1d05a4c73ffc8efd863313f1aa85f6dbe8

• You can vote on SubSquare here
• You can vote on Polkadot.js here

The referendum is open for 50,400 blocks (Approx 7 days) and will be open until block #5,090,399 (~ 16th March ~23:15 UTC) and will be activated, if passed, 7 days after on block # 5,148,000( Estimated Time: ~ 2024-03-23 23:15 (+UTC) )

[gkwaiting]

How can we allow a method to directly reset an account to zero? No one’s account is safe by doing this. Even if 100 million people vote, the account amount of any user cannot be touched, regardless of any reason.

[gkwaiting]

Although I sympathize with Stefan’s experience, I also hope that the team can help you recover your losses from an emotional perspective.
But in this case, for people who don’t know the Genesis team, how can the lost wallet be restored through external calls? It’s not just a matter of fairness to ordinary holders. How to ensure that this forceTranser is not abused. Since it is an off-chain accident, is there no way to solve this problem through off-chain financial means?
This approach greatly affects the trustworthiness of chain assets.

[ImdioR]

@gkwaiting

How can we allow a method to directly reset an account to zero? No one’s account is safe by doing this. Even if 100 million people vote, the account amount of any user cannot be touched, regardless of any reason.

Good day Gkwaiting
Thank you for your comment.

The extrinsic call SetBalance permits to make changes on-chain.
Indeed, as you highlighted, this is a very powerful extrinsic call that should be used in very edge cases.

The onchain voting was submitted on voting right now as Democracy Proposal and requires a SuparMajority approval where all CFG token holders can vote Aye, Nay on this proposal.

@gkwaiting

But in this case, for people who don’t know the Genesis team, how can the lost wallet be restored through external calls?

Each situation should be reviewed as a new case.
In this case, the OTC Contract with KYC process and the submission of tokens from the wallet with Identity permits identify the parts involved.

[gkwaiting]

Was the old address bound to KYC information before? And does the OTC contract process also have the same KYC information?
Sorry, I don’t know more yet

[ImdioR]

@gkwaiting

Was the old address bound to KYC information before?

@stefan

The tokens were purchased from members of the Centrifuge founding team on 04.04.2022 through an OTC transaction, contractually assigning the account above to me, Stefan George. Tokens were issued in a vesting contract for 730 days.

The inaccessible wallet address was written in OTC contract.
You can ask @stefan more information about this.
Aslo you can check governance call on YouTube where @stefan presented this proposal and also answered questions.

@gkwaiting

No one’s account is safe by doing this

Please correct me if I’m wrong, but USDC/USDT can freeze assets as well:

• https://cointelegraph.com/news/circle-tether-freezes-over-65m-in-assets-transferred-from-multichain

But in this case that action (freezing cfg tokens on old wallet and reminting them on a new one) will increase the total supply of CFG…

[gkwaiting]

Different in nature, multi-chain, Circle and Tether are centralized organizations. Even so, they did not directly modify the amount of the account.

If this approach occurs on Bitcoin and Eth, even if it involves hundreds of millions of funds, it will definitely encounter huge opposition.

stefan is an early supporter of CFG and an important member of our team.
I also hope it gets its assets back.
If the old address has been bound to KYC information before, instead of relying solely on off-chain private relationships, there will be no security issues, and I believe everyone can trust his ownership of the account.

I just feel that this way of dealing with it is somewhat in conflict with blockchain culture and the way blockchain is commonly dealt with, although there are governance processes to supplement it.

[gkwaiting]

If we were just a contractor, maybe it would be easier to accept this kind of treatment. We are a main chain, so the incident feels more serious.

Maybe there is no better way. If the old address has KYC information bound by signature, I support helping him retrieve his valuable assets.

[gkwaiting]

In addition, since the amounts of the two accounts were directly modified,
Flaws in the flow of funds across multiple accounts in the CFG blockchain will be damaged.
It is suggested that our engineers need to create a special deposit book on the blockchain to record the “special transfer” book. Otherwise, after many years, the capital deposit will not be replenished.

[ImdioR]

Good day there!
The Democracy Proposal has passed with the following results:

• Aye (121)≈ 12.39MCFG
• Nay (3) 12,125 CFG
• Turnout (2.22%) ≈ 11.68M

This proposal is scheduled now and will be enacted at block #5,148,000 ( ~ 7 days and 20 hours)

Thanks everyone for participating.

[SYZ]

@stefan It looks like you were able to regain access to tokens. Glad you got your tokens and we have seen on-chain governance and forum debate address your concern.

[stefan]

Thank you everyone for participating in the discussions and the voting itself. I am pleased about the strong result and will continue contributing to the ecosystem.