The Tally Newsletter, Issue 31

May 13, 2021

Welcome back for issue 31 of the Tally Newsletter, a publication focused on all things decentralized governance. We’ll keep you updated on key proposals, procedural changes, newly launched voting systems, shifting power dynamics, and anything else you need to know to be an informed citizen. 

This week we cover: 

  • Rari Capital’s hack and recovery process

  • Vitalik’s meme coin donations kickstarting decentralized treasury management

Plus brief updates from around the ecosystem.

Rari Capital Loses Funds in ETH Pool Hack

TL;DR: The hack has led Rari to accelerate the transition to DAO governance, ensuring the community can make any key decisions over compensation.

Over this past weekend, Rari capital faced an existential crisis as roughly $11 million in Ether was drained from their ETH yield aggregator pool. 

As explained in the team’s post-mortem, the loss stemmed from issues in Rari’s Alpha Finance ibETH pool integration. The attacker was able to manipulate balances through the use of flash loans, allowing them to withdraw more than they deposited. Roughly 60% of the pool’s funds (2,600 ETH) were drained before the attack was stopped.

While Rari has been a community driven organization from the start, with over 80% of RGT tokens distributed to users through liquidity incentives, this attack is accelerating their transition to fully token controlled governance.

First and foremost, the Rari team has elected to transfer the 20% of tokens reserved for developer incentives to the Rari DAO controlled by token holders. In addition to providing funding for user compensation, this positions the core Rari team as ordinary DAO contributors like anyone else. In the future, developers including the core team will need to seek grants directly from the DAO.

The community hosted a call in discord to go over potential resolutions to the hack. While full plans haven’t been determined yet, an initial vote is up on the RGT snapshot to determine the targeted percentage for reimbursing ETH pool depositors. Token holders and the core team will then need to make further plans on how to raise the funds required for compensation.

With more powers shifting from the team to RGT token holders, we can also expect to see a move towards on chain governance. Time sensitive controls (like the rebalancing mechanism used to safeguard remaining pool funds during the hack) would likely remain under the control of a multisig, while treasury management could be handled through a more deliberative voting process with smart contract based proposal execution.

Vitalik Donates Airdropped Meme Tokens for Public Goods.

TL;DR: Donation recipients including Crypto Relief and the Gitcoin Grants Multisig face a difficult challenge of prudent treasury management.

Over the past several years, it’s become commonplace for low reputation projects to airdrop tokens to Vitalik Buterin’s wallet as a form of marketing. But while some users and projects expected the airdropped tokens to remain out of circulation, this assumption has proven to be false.

In recent days, the Ethereum network has faced persistently high network fees and utilization due to an explosion in dog themed meme tokens. Most notable is the SHIB token, which catapulted to huge value in the past month as it was listed on a series of centralized exchange platforms. While Vitalik hadn’t taken interest in the meme tokens up to this point, the combination of high valuations and negative effects on the Ethereum network may have changed his calculations. 

In all, Vitalik donated tens of millions worth of ETH and various meme tokens to several public goods organizations including Crypto Relief (focused on fighting Covid in India) and Gitcoin. While this will have a huge financial impact on these organizations, it also creates some unique challenges for managing treasuries in a decentralized context.

Gitcoin’s Kevin Owoki has started a community discussion on how to use the AKITA tokens received as part of Vitalik’s donation spree. Crypto Relief is also considering similar questions for their SHIB tokens, with a proposal by market maker Wintermute to partner on a long term sales program. While the nominal value is extremely large, lack of liquidity makes it difficult to cash out. 

In addition to questions of how to dispose of the meme tokens with minimum market impact, Gitcoin faces an additional question of how to deploy the funds effectively. While some favor holding the received funds as a permanent endowment and spending only from investment income, this needs to be weighed against possible benefits of deploying the funds faster. Gitcoin and Crypto Reliefs’ handling of these token donations will offer an important test case for DAO treasury management and diversification plans.

In Brief:

  • MakerDAO voters are on track to reject staking rewards proposal:

  • Balancer v2 exchange protocol is live on Ethereum mainnet:

  • PoolTogether passes proposal to fund RabbitHole onboarding incentives despite high gas prices:

  • Vitalik starts Uniswap governance discussion over creating a Schelling coin oracle similar to UMA:

  • Aave reveals work on a private, KYC enabled pool for institutional investors:

  • Tether releases report on reserve composition, but details remain sparse:

  • xToken faces two exploits and millions in losses for LPs:

Thanks for joining us for issue 31 of the Tally Newsletter! Be sure to check out the Tally governance app, join us on Discord, and subscribe to our protocol calendar for the latest updates!

Anything we missed? New developments or protocols you’d like to see covered? Drop us a line at


Nate, Tally