Closing down SPEW - here is how it looks...

in LeoFinance2 months ago

As everyone would now be aware, the WLEO project has collapsed for now. What the future looks like is anyone's guess, and I don't envy @khaleelkazi and his team in working out how to sort through the mess. Crypto's wild west strikes again.

SPEW pool was set up to allow smaller holders to participate in the WLEO/ETH adventure. And everything was looking so rosy, with a rising LEO value, a really nice first bounty payout and blue sky's ahead. But then the shit hit the fan, in a big way.

leo post divider.png

SPEW got lucky.

I found out about the hack while I was at work, and unable to do anything about it. For 2 hours, I checked discord frequently, and stressed over saving the remaining funds. Finally, I finished my shift and raced home. In the door, straight to the computer, login to SPEW accounts and Metamask, go to the pool and remove liquidity. Push the gas fee higher and higher to accelerate the transaction. Straight to wleo.io and unwrap the WLEO. phew.

Since then, the dust has settled and the following is now clear.

  • SPEW's unwrap was the very last one processed before that facility was shut down.
  • SPEW has actually turned a profit, in USD terms from start to finish.
  • We are so lucky. The unwrap was literally seconds before the site was shut down. 1 red light on the way home, and things would be different. I dealt with SPEW, then swapped to my personal account, withdrew and tried to unwrap. In the 2 minutes between unwrapping SPEW, and swapping to personal accounts, the site stopped.

Now, I don't doubt that @khaleelkazi and the @leofinance team will come up with a plan to make good on some of the WLEO value held by legitimate accounts, but having those funds in Hive Engine and clear makes the process of unwinding SPEW so much faster and easier.

leo post divider.png

How much was saved?

When I removed the liquidity, the account ended up with 5.88 ETH and 48,333 LEO. The current value of those assets is $9,400.91. For those following along, we started with $7044.14 in assets, in the form of 11.11 ETH and 24,648 LEO. So, against all the odds, SPEW made a USD profit of $2,356.77 in just over 2 weeks. Truly amazing how lucky things have turned out. A return on investment of 31% in 2 1/2 weeks. Without even including the first bounty payment we received.

Yes 31% profit!

The fact that the initial contribution included some ETH from a couple of people, lots from Spinvest, and then all of people's hard earned LEO complicates the maths.

Guiding principles I have used:

  • Value everything going in in USD.
  • Everyone gets allocated a % share.
  • Value everything going out in USD.
  • Everyone gets the same payout, regardless of if they put in all LEO, some of each (me, @stortebeker and @roleerob), or all ETH (spinvest)

So here is my suggestion:

proposed shutdown plan.png

In the above table you will see how everyone is proposed to be refunded. The last column shows the number of LEO tokens you will receive if this plan is acceptable to participants. For those who put in ETH, the return will be a mix of ETH (less than you put in) - and LEO (significantly more than you put) in to make up the USD returns to match the pool share. To work out the ETH component, I looked at how much each put in, and payed out the "saved" ETH in the same proportion.

Let's look at three examples:

  • @josediccus put 500 LEO in, worth $0.14 each at the start. Total $70 input. They will receive a payout of 615.774 LEO, worth $0.149 (price when I calculated this). Total received $91.75. Profit $21.75 - 31%.

  • @roleerob put in 500 LEO $70 value plus 0.25 ETH - $80.84 at the time. Total input $150.84. They will receive 999.049 LEO worth $148.86 plus 0.1322 ETH - worth $49.47. Total received $198.33. Profit - 31%

  • @spinvest put in 10.02 ETH, worth $3,239.86. They will receive 5.30 ETH worth $1982.78 plus 15298.258 LEO, worth $2279.44. Total received $4262.22. Profit - $1022.36 - 31%

leo post divider.png

Fair for everyone. Everyone walks away with a 31% profit.

Let me know what you think, if there are no objections to this plan, the funds will be sent around 18 hours from the time of this post. I think its completely fair, but please voice any concern's or questions asap. I want to close this book quickly, but if anyone can see a hole in my plan, please let me know.

Tagging all participants:

@spinvest, @jk6276, @tandara, @forexbrokr, @tbnfl4sun, @pouchon, @eirik, @shanibeer, @oakshieldholding, @jocieprosza, @josediccus, @roger5120, @stortebeker, @mistakili, @steemitromney, @underground, @dera123, @deflacion, @roleerob, @flemingfarm.

Cheers,

JK.
@jk6276 for @spinvest-leo and the SPEW pool.

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It was a nice ride!

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Quite a roller-coaster experience to be sure.

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Plan looks good to me. Amazing timing and go figure, it seems crypto can't have anything nice, someone always comes along to screw it up for the rest.

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ONLY ONE OBJECTION:

and it's strictly from a legal standpoint, Personally I like the above plan...

Check and see if there are any legal hangups for converting to USD on 2 separate basis.

  1. ETH and LEO were input, LEO Mooned and ETH collapsed.
    ....a: making the SPINVEST investors WHOLE is a great idea, but is it kosher?
    Do we need a vote from the LEO Poolees?
    ....b. Is using the "USD" strictly a point of reference, I know that in the USA there are
    various tax liabilities if I convert to USD or certain USD Stable Coins. That is exactly
    how my tax pro worded it for me.

  2. Just make sure we are fulfilling the whitepapers and agreements of #1, SPEW and to a lesser extent,
    #2, Spinvest.

I had a long discussion on this exact topic with my current lovely assistant and it was fruitful for
uncovering the possible pitfalls. IMO if everyone (or a majority) agrees this plan is the BEST
and the most FAIR. Making SPI liable for losses only is a bad dealio, but we gotta CYA as we say...

CYA = Cover your Bum 🤣

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  1. There does not seem to be any objections to this, as for a vote, well from this comments section I would say the majority of SPEW participants are happy. Yes the pool lost ETH and gained LEO - but the point of the pool was that we are all in it together. Punishing SPINVEST because the ETH was stolen does not seem fair to me. On the USD point, I have used this as the USD value of the inputs was the only readily accesible comparison point between the two tokens (LEO and ETH). We are not actually converting to USD, just using it as the common frame of reference. Could have used anything to compare, USD is just easiest.

  2. Everyone that has responded has voiced approval. Spinvest privately - via chat between me and @silverstackeruk, @shanibeer on discord, 8 members in comments here (up to this point) (I have included you in this "Personally I like the above plan") That's 10 out of 20 already. I am also a spew participant, and obviously i like the plan :-)

I could hold longer for more opinions, but it appears to me that people will be fine with this outcome.

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Very Good, 100% approval so far and no dissent. I agree, no reason to hurt spinvest, just thinking we better watch our own club agreements and so forth. Looks like you have done the homework and gotten Straight A's!

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Good point to raise to ensure that we are following club agreements. However, here, I think it is about the pool members: they took the risk.

That's one heckuva vote you have there, Sensible Aunty!!!

😋

😍

So glad to see you Back!

Thank you - I've had no internet access for a week. The router burned out and then I used all the data package on my phone. It wasn't stressful at all! 🤣 Hope you are okay and family things are not too demanding. The sun is shining here and I am just going for a walk 😁

👁💖@shanibeer

😱

How you doing? I've had no internet for a week 😱 Just catching up. Stay safe 😘

I agree @jk6276, thank you for sorting this out.

Thank you for all of your hard work @spinvest-leo / @jk6276, to work through all of this mess. While it benefits me obviously, the fact it has resulted in a profit it still mystifying, to be quite frank. No expert on Liquidity Pools, it seems clear the moment the hacker begin generating bogus WLEO, the value of it was dropping, while he (she?) was making off with as much of the ETH in the pool as they could manage ...

Anyway, I know you have done what you can and gotten agreement from Khal what you managed to unwrap was full value LEO ... Like you apparently, my personal stake didn't fare nearly so well. Resulting in far and away the largest loss of my 3 years of investing in this new asset class ...

It did not escape my notice that you elected to take care of the SPEW funds first, resulting in what we all see here. Only then turning you attention to your own funds, it speaks very well for your integrity. I can only hope with your own personal funds, you have fared far better than I did.

When the LeoFinance team puts their own final report together, I for one will be hoping this issue is clearly covered and explained.

I will reply separately to your request for my ETH address, for the return of my share of what has been recovered.

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48333.943 LEO has been distributed to SPEW participants as outlined above. Thank you everyone for being a part of this wild ride. A closing post with these details will come out tomorrow.

@spinvest, @jk6276, @tandara, @forexbrokr, @tbnfl4sun, @pouchon, @eirik, @shanibeer, @oakshieldholding, @jocieprosza, @josediccus, @roger5120, @stortebeker, @mistakili, @steemitromney, @underground, @dera123, @deflacion, @roleerob, @flemingfarm.

I would like @roleerob, @stortebeker and @spinvest (as well as myself) to confirm their ETH address, so I can send those funds out also.

Thanks again everyone.

JK.

(upvoted this comment for visibility)

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Replying to your request for my ETH address @jk6276, I prefer to not have it "immutably enshrined" in the Hive blockchain. I have left you a DM in Discord. Please let me know if that will work for you.

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It's definitely a sad way to end things right now. Imagine we had about 3 months to run spew it could have been amazing. But then putting in 500 and earning 615, that's not bad currently and thanks for this so far, maybe sometimes in future we could do this again

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It would have been great to have had it all run smoothly, things were looking so good. It is something I'd really be hesitant to run again, i was feeling very stressed out with $10,000 of people's money in my control, and stuck at work unable to save it. Just so relieved when it turned out for the best.

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Thanks for your timely response, I am of course fine with the payout plan you propose. However, are we not abusing the system this way? Isn't a part of our WLEO amount fake? What of the other LP's that were not able to convert back to LEO? Are they stuck with valueless WLEO?

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I asked @khaleelkazi in discord and he said our leo is fine.

Screenshot_20201012144032_Discord.jpg

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I'm in shock, I thought most was lost. Does this mean any future type Wleo is off the table 4 you?
image.png

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I was stunned when I realized we were ok, and because LEO has held up so well, even made a profit.

I very much doubt I will co-ordinate another pool like this, I found it pretty stressful to be honest. If a new, safer WLEO type project is re-launched, I would be likely to join in again personally, but not running a pool. I'm ok with putting my own funds into a high risk scenario, and managing my own risks. But having other people's money on the line was nerve-wracking TBH.

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Thanks, I guess it's not to fair to have someone doing all the worrying while I just sit back and ride the wave.

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I got unlucky - my test thousand went through but my main 10K unwrap didn't.

Although looking at the withdrawals to wrapped-leo there's A LOT of big accounts that didn't unwrap so I guess they'll be some compensation coming back in the form of LEO.

You did get lucky, fair play!

This SPEW fund did get lucky indeed. My personal situation was similar to you. I got home, immediately pulled this SPEW fund out, and unwrapped straight away. Then swapped to my personal accounts and tried the same. In those few minutes, the unwrap was shut down, so I still have my WLEO in my Metamask.

I'm sure that they will figure out the fairest way to make up as much of what was lost as the can. Gotta keep in mind that a large chunk of the funds stolen were LeoFinances (aka Khal's) funds also. I really hope people are understanding, and don't demand too much from him.

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I imagine he must have lost a lot - the only 'whale' I saw pulling out in time was Neal.

There are several ways they can compensate I guess. I suppose the easiest way would be to set up a WLEO 2.0

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Here are the final @wrapped-leo transactions:
final wrapped leo transactions..png

So close for you.

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Yes, and if you look down the list, there's not a lot of transfers given how many people were in the pool!

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All looks good to me. Thanks for being 'on it' so quick and sorting the aftermath! We are indeed lucky.

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We got lucky in the end - it was touch and go for a while, definitely a stressful time at work, knowing about what was happening but not able to get us out till my shift finished.

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I was not lucky either - when I clicked to withdraw from the liquidity pool, there was nothing but fake Leo - I don't know how to get back ETH

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It is so sad that many people have lost out from all this. I'm sure Khal will do what he can to make things right. I'd imagine some kind of airdrop to people based on pre hack balances or something - I don't know. I don't think all is lost for you, it's just going to take them a while to sort out what to do.

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Why are you so sure of people you don't know - I'm not sure of people even whom I know!

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Oh man, what an adventure! Thanks for racing home and pulling out in time. That's part of my appreciation for handling our funds so well. Too bad what happened, but this little rollercoaster ride got me convinced about your competence and reliability. Awesome job, let's do this again! Also, ending up with a bunch of LEO is not a bad thing, so thank you once again. As for my personal accounts, that's a big mess, but I'm so glad the SPEW got off lucky.

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Respect JK! You did a fantastic job of getting through a stressful situation. Double respect for sorting SPEW funds before your own.
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