Pass Through yETH Recovery Assets to Affected FiRM Users

FiRM
1

Pass Through yETH Recovery Assets to Affected FiRM Users

Summary

This proposal seeks to claim Inverse Finance’s allocation from the Yearn yETH optimistic recovery plan, and distribute 100% of the received ysWETH shares to the 4 affected FiRM users pro rata based on their yETH balances at the time of the exploit.

Under the Yearn recovery plan, integrator-held balances are claimable by the integrator, with the expectation that the integrator distributes the recovered value onward to the underlying users. Inverse had 4 affected FiRM users with yETH exposure, and these users have since fully repaid their debts. As such, the recovered assets should be passed through to them in full.

Background

The Yearn yETH exploit resulted in a loss of underlying ETH backing yETH. Yearn has since recovered a meaningful portion of these assets and launched an optimistic recovery plan to distribute the recovered value back to affected holders. Recovery eligibility is based on balances at snapshot block 23914085, and for integrator-held balances the integrator is treated as the claimant. The downstream distribution is then handled by the integrator according to its own governance process.

Inverse had 4 users on FiRM with yETH exposure at the time of the exploit. These users are included in the Yearn recovery plan. Since all 4 users have now fully repaid their debts, there is no remaining protocol debt to offset, and the recovered assets should therefore be returned to the affected users directly.

The Yearn recovery claim contract allows claimants to call claim(false), which mints ysWETH recovery vault shares to the claimant address. The number of ysWETH shares received cannot be known in advance, because the amount of shares minted depends on the recovery vault share price at execution time, and DAO governance execution is not instantaneous.

To handle this cleanly, a simple helper contract has been deployed at 0xFeB4763867Ce21506bE8037eF4f10737E12fDF2e. The helper can only be called by the Inverse Treasury, reads the Treasury’s full ysWETH balance at execution time, and distributes 100% of that balance pro rata to the 4 affected users. It does not custody funds itself, instead using transferFrom(Treasury, user, amount), and is single-use. This avoids the need to predict the amount of ysWETH in advance and ensures the full recovered balance is distributed in one execution flow.

Distribution

The distribution will be based on each user’s yETH balance at the time of the exploit.

User yETH balance Share
0xC95f235896F5a82486Ab645596fC29b76e52900c 196.178283039425670085 52.572498%
0x3C9F71Ae57FEA4a2E38C9d413705Ed1FDcD9e3Da 121.518520195354211134 32.564930%
0xaE79f0562C2128cC12d0ac068aC288856Fe0e1AB 0.966854089014142159 0.259101%
0xc989Df5B623fa84E57e99eC9006283510Ea8C2eC 54.493967510951575023 14.603472%

Total yETH balance: 373.157624834745598401

Contracts

On-Chain Actions