Thread by @kaiynne

I’ve had a few pings about the @kucoincom hack over the weekend, just to save my DMs from turning into even more of a dumpster fire than usual, here are my thoughts. They are my own, and do not represent the collective views of the @synthetix_io community, because obviously lol.

So we heard there were anomalies within a few minutes of the news from a number of people who track on-chain movements closely. It seemed ~500k of the ~1.5m SNX on kucoin was in a suspected hacker address already. Kucoin said they would be making an announcement shortly.

When I heard Kucoin was planning to cover the ~150m loss from insurance I was a little skeptical. I have some experience insuring tail risk from working with a client of @Blueshyft a few years ago. There are not many people out there who will write cover this large and weird.

The cost is also prohibitive, but I mean Kucoin makes a lot of profit maybe it made sense given they have a pretty good track record for security etc.

Next I checked my account on Kucoin, turns out I had some SNX sitting on there from about six months ago when I used to use it to fund bounties and other stuff like kain.eth. So I write this SNX off immediately, if you have funds on an exchange and it gets hacked it is on you…

I really cannot stress this point enough. If you leave funds idle on an exchange for like six months and forget they are there you deserve to lose them. It is like leaving an envelope of cash on your doorstep for months. Maybe it doesn’t get stolen or blow away but if it does…

If you have funds on an exchange they should be there for a reason, and only as long as they need to be. If you get lazy and lulled into a false sense of security you are in for a rude awakening.

So back to the hacked SNX, it was less than half a percent of the supply. So my immediate response was there is literally zero chance we are getting a SIP to pass to try to fork the protocol or something equally dumb. And that was basically the end of it for me.

Someone else could write a SIP to freeze the tokens through a fork but I would have voted against it. When we implemented a SIP to slash frontrunners in 2019 the blowback was not worth it. Even though I stand by the fact that the SIP-6 mechanism was efficient as a deterrent 😬

So now we have a very strong norm in the Synthetix community against any kind of balance modification even if it is implemented at the protocol level. And with the pDAO in control of all upgrades, there was just no chance of a fork happening from my perspective.

The other consideration is that SNX liquidity as not what it was in the @teo_leibowitz era. SNX is on multiple DEXs and CEXs with significant liquidity. I had no concerns about the impact on the token if they were dumped. I figured smart actors would use it for accumulation.

And that is exactly what seems to have happened. The dump candle on the 1 hour tf ended up green 🤯

I have been telling people close to me that the last 2-3 months since we moved to a fully DAO governance framework felt incredibly freeing, and this is a perfect example. I have no power to change this situation, even if I wanted to.

But knowing that even if I proposed a fork or something equally crazy the community would harshly reject it removes any sense of being conflicted. I am now not even in a position to make a bad choice against the will the community, and it feels amazing.

I of course still have a deep responsibility to spend my time thinking about how best to navigate the craziness that is DeFi and advocate for what I believe is the optimal path forward to balancing all priorities, but I have hung up my semi-benevolent dictator hat for good.