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November 3, 2021

THORSwap $THOR IDO Post Mortem

Phase 1 of the THORSwap IDO which took place on Thorstarter on Nov 1st was over subscribed by almost 100%.

Phase 2 (the uncapped $THOR pool on THORChain) which took place Nov 3rd on THORSwap was however met with a number of unexpected/controversial whale activity which left many users with unpleasant experience.

Here are some highlights and recent statements from THORChain and THORSwap respectively.

  1. Launch was scheduled for 2pm UTC
  2. Whales started contributing a bit after that, but most users could not get the UI to work
  3. The announcement that the $THOR pool was opened was made at 2:16pm UTC (https://discord.com/channels/831398059484250142/832288784922050600/905460439180263464)
  4. Two minutes later, the pool was filled (here's an announcement of that at 2:18pm)(https://discord.com/channels/818198163776733245/818354103536451664/905460955322912788)
  5. At this point many users are disappointed due to whales getting $THOR at lower prices, and most users who able to participate were met with a >$6 token price
  6. THORSwap released a statement recognizing that whales stole the show and more infomation would be made public (https://discord.com/channels/831398059484250142/832288784922050600/905492773963173978)
  7. In typical crypto fashion, users start investigating and it soon became evident that the THORChain treasury itself got in before users with over 1m $RUNE (https://discord.com/channels/838986635756044328/838986636665815072/905513144871452732)

Statement from THORChain

To support the THORChain ecosystem, the THORChain treasury invested in the $THOR IDO and deposited into the liquidity pool. The treasury did its best to average into the pool by making 6 transactions over a 20 minute period. The intent was NOT to get in before others. The Treasury did not know at the time that the faucet was not working properly (approved for the THORChain router contract) and were not aware that the treasury got in before everyone else.

The Mistake

Treasury received out-of-band $THOR tokens, allowing it to asymmetrically add liquidity to the pool. Since the faucet was not working, the treasury was able to get a total of (1) transaction totaling 100k RUNE in prior to anyone else. Following that transaction, the treasury made another 5 deposits totaling 1.3M RUNE (200k RUNE, 250k RUNE, 250k RUNE, 250k RUNE, 350k RUNE). The last transaction took place almost exactly 10 minutes after the IDO was available to everyone.

For transparency, all of the treasury transactions for $THOR can be seen here: https://etherscan.io/token/0xa5f2211b9b8170f694421f2046281775e8468044?a=0x04c5998ded94f89263370444ce64a99b7dbc9f46

Remediation

The team are evaluating options for remediation, particularly surrounding the 1 unfair transaction that allowed the treasury to get in before any other participants. A follow-up statement will be provided in the next 12-24 hours.

Statement from THORSwap

We know our entire community has been psyched for the THOR token launch, and we’re deeply unhappy - as many of you are - with the fact that the process did not go as smoothly as we had hoped, and worked hard to achieve.

The capped and fixed price Thorstarter launch resulted in 5,057 participants entering at private sale prices. Today's uncapped and floating price launch on THORChain resulted in almost 1,200 participants and was strongly influenced by large investors.

To support the THORChain ecosystem, the THORChain Treasury invested in the $THOR launch and deposited into the liquidity pool. The Treasury did its best to average into the pool by making 6 transactions over a 20 minute period. One of the 6 transactions happened before everyone else, putting retail investors at a disadvantage. We will make things right.

Please allow us to be very, very clear here: The intent was NOT to get in before others. The Treasury did not know at the time that the faucet was not working properly (approved for the THORChain router contract) and were not aware that the Treasury got in 1 transaction before everyone else.

Obviously this is not acceptable, and it leads us to...

The Problem

Treasury received out-of-band $THOR tokens, allowing it to asymmetrically add liquidity to the pool. Since the faucet was not working, the treasury was able to get a total of (1) transaction totaling 100k RUNE in prior to anyone else.

Following that transaction, the treasury made another 5 deposits totaling 1.3M RUNE (200k RUNE, 250k RUNE, 250k RUNE, 250k RUNE, 350k RUNE). The last transaction took place almost exactly 10 minutes after the launch was available to everyone.

For transparency, all of the treasury transactions for $THOR can be seen here: https://etherscan.io/token/0xa5f2211b9b8170f694421f2046281775e8468044?a=0x04c5998ded94f89263370444ce64a99b7dbc9f46

Remediation: Airdrop

We are feeling this as deeply as anyone out there, and we’re going to make it right. Our community is our lifeblood and we will not renege on our commitments to you.

The team is evaluating options for remediation, particularly surrounding the 1 unfair transaction that allowed the Treasury to get in before any other participants. To that end, LP participants will be receiving an extra airdrop. More details to come.

We’ll be back in touch with more tomorrow, and thank you for your patience and support as we work to make things right.

via Discord

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