Restitution 2.0

General Discussion
1

Restitution 2.0

Context

Shortly after the BadgerDAO’s front-end exploit of 2021, the community decided to use a portion of the DAO’s funds to compensate those affected by this incident. Through several Badger Improvement Proposals (BIPs), it was decided to establish a multiphased restitution program that ultimately distributed Treasury funds to users in proportion to their stolen funds. The following BIPs summarize the initial program implemented:

In a nutshell, recoverable tokens were integrally returned to their respective owners, stolen native tokens (BADGER and DIGG) were restored from the Treasury holdings, $10m worth of wBTC was purchased with Treasury stablecoins and distributed to the remaining pool of victims in proportion to their loss, and similarly, 2M BADGER tokens were distributed to this group through a program called remBADGER. Details of the remBADGER program can be found in BIP 80, and a history of its operation and performance can be seen in the following dashboard.

In February 2024, the remBADGER program concluded. Nevertheless, given the low BADGER price point at that time, the total dollar value obtained by the users that decided to remain in the program until its completion didn’t fully compensate for their original value lost. For this reason, the community proposed, voted on, and passed a BIP describing a continuation of the restitution program. This BIP was then followed by a few amendments:

Approved Program Specifications

  • 1 million BADGER tokens are specifically dedicated to the program from the DAO’s Treasury.
  • Only existing remBADGER holders can optionally participate.
  • Andy and Steve are allowed to enter the initial remBADGER program with their original stake.
  • A two-week deposit period will be enabled for remBADGER holders to deposit into a new locking vault. After this period, deposits will no longer be allowed.
  • remBADGER cannot be withdrawn from this vault during the initial nine months of the program.
  • remBADGER can be withdrawn from this vault from month nine through twelve on a weekly vesting schedule.
  • 400K BADGER vests to remBADGER lockers from months seven to eighteen with the ability to withdraw upon vesting, and 600K BADGER vests during months nine to twelve, also withdrawable upon vesting.
  • Withdrawing, once possible, will not affect BADGER distribution allocations.
  • The program’s official start is set retroactively to February 18th, 2024 (The day BIP 103 was approved).
  • If at any given time a four-hour TWAP BADGER price is reached that equates to full restitution, based on the amount historically emitted (including BTC and other assets paid out as part of the restitution program) + remBADGER value for the participants, the program is deemed completed, and:
    • remBADGER becomes fully withdrawable
    • No more rewards are emitted

Program Instructions

  1. remBADGER holders will be able to deposit for TWO WEEKS only into the new locking vault bremBADGER once deposits open on May 20th, 2024 at 12PM EST. To do so, they must:

    • Visit Badger Vaults Sunset, a new app developed for this program (and soon to simplify the withdrawal from the rest of the deprecated vaults).
    • Accept the Terms and Conditions.
    • Approve and deposit the amount they wish to lock.
    • Once deposited, assets can’t be withdrawn until the lock is over, even during the deposit period!

  2. Once the two-week deposit period has ended, deposits will no longer be allowed (this is enforced at the Smart Contract level). So, spread the word!

  3. As soon as the locking begins, a snapshot of the lockers and their locked amounts will be taken.

  4. BADGER token distributions for the two vesting programs will be set up through Sablier, one of the most trusted token streaming protocols.

    • During the distribution periods described above, lockers will be streamed BADGER tokens linearly on a per-second basis and will be able to withdraw them as they are received from the Sablier app or Smart Contracts.
    • The 400K and 600K BADGER distributions will be allocated to lockers in proportion to their locked amounts.

  5. Once the locking period ends and withdrawals are enabled, users will be able to withdraw their remBADGER from the bremBADGER locker in weekly vests during three months through the sunset app.

    • Withdrawing during the vesting period is optional and can be done at any cadence desired. For example, if desired you can withdraw weekly, only after 6 weeks or once at the very end of the three months.
    • The withdrawal amount is not optional, calling the withdrawal function will lead to the withdrawal of the total vested amount up until that point in time.
    • Vested amounts will be displayed through the same app.
    • Vests are linear, therefore, every week leads to the unlocking of 1/12 of the total locked amount.

  6. A monitoring solution will be put in place to track the 4 hour BADGER TWAP and dynamically estimate the historical value emitted in the program. If at any given time, breakeven is achieved during the program, the following will occur:

    • Full withdrawals from bremBADGER will be automatically enabled through the app, regardless of the stage of the program.
    • BADGER streams through Sablier will be canceled and the remaining BADGER will be clawed back to the Treasury. Note that BADGER emitted up until that point will be claimable.
    • The community will be notified through Badger’s different communication channels.

Program Notes

  • Only current remBADGER holders can participate in the program.
  • The bremBADGER locking vault is NOT transferable and does not return a token receipt upon deposit.
  • Sablier allows for transferability of streams from one recipient to another. This will be enabled for the streams in question but the usage of this feature is the responsibility of the user.

Program Timeline

  • February 18, 2024: Program Began
  • May 20, 2024: Deposits to bremBADGER are opened
  • June 3, 2024: Deposits to bremBADGER are closed
  • August 18, 2024: Linear distribution of 400K BADGER to lockers begins.
  • November 18, 2024: Linear distribution of 600K BADGER to locker begins and bremBADGER weekly withdrawals begin (note: first remBADGER vest occurs a week after this).
  • February 18, 2025: End of linear distribution of 600K BADGER to lockers and underlying remBADGER is fully vested and withdrawable from bremBADGER.
  • August 18, 2025: End of linear distribution of 400K BADGER to lockers.

Resources

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